Production, quality and stock price hiccups aside, direct sales is working for Rivian
RIVIAN Automotive’s travails continue with a recent recall of 12,200 September delivered trucks, vans and SUVs to inspect a potentially loose steering attachment.
To its credit, the EV start-up quickly deployed a fleet of mobile service vehicles along with leveraging its own service centres for the recall, with repairs identified and most vehicles cleared within 10 days of the recall being announced.
Rivian’s CEO, RJ Scaringe said the quick response to the recall shows the value of the company’s direct-to-consumer sales model that skirts dealers and other third-party retail entities.
According to Automotive News, the recall initially caused another plummet in the company’s stock price (since recovered) that industry commentators say, “adds another demerit for an EV start-up already struggling with shortages and missed delivery targets since launching production last year.
Rivian shares are down 66 per cent year-to-date due to continuing production challenges and a broader market selloff.
And that’s to say nothing of the multi-faceted litigation Rivian is embroiled in relating to alleged stock market securities breaches along with a barrage of online complaints from consumers who are not happy with their treatment, including unexpected price rises at the hands of the company.
In May, New York legal firm Levi & Korsinsky LLP notified Rivian investors of a class action securities lawsuit seeking to recover losses on behalf of Rivian investors who were adversely affected by alleged securities fraud.
Levi and Korsinsky (L&K) said: “The lawsuit is on behalf of investors that purchased or otherwise acquired Rivian common stock pursuant and/or traceable to Rivian’s initial public offering on November 10, 2021 and/or between November 10, 2021, and March 10, 2022.”
According to L&K documents issued in connection with the initial public offering it contained representations that were materially inaccurate, misleading, and/or incomplete because they failed to disclose, among other things, that the R1T electric pickup truck and R1S electric SUV were under-priced to such a degree that Rivian would have to raise prices shortly after the IPO.
A second New York legal firm, Pomerantz LLP, is also on Rivian’s case with class action litigation of a similar nature to L&K.
However, taking a positive out of the latest recall, Mr Scaringe said the company had earned some goodwill from customers who witnessed a nimble, in-house service operation that could also lean on its mobile service fleet.
“This is something where we identified a potential issue and we wanted to get out as early as possible,” Mr Scaringe said.
“We made a decision on a Friday afternoon Oct. 7 to make this move, and by Friday evening repairs were underway,” he added. “And we worked through a significant majority of the vehicles in the next 10 days.”
The fix takes a few minutes to ensure a bolt is properly fastened, however the latest recall follows two previous recalls for an improperly secured seat belt anchor and an airbag issue in 700 vehicles.
In Rivian’s defence, Mr Scaringe said the company’s sales and service model that eliminates reliance on franchised dealers enable it to move quickly when issues such as the steering fastener recall arise.
“For us, one of the most powerful things was having our direct-to-consumer model, where instead of having to go through third parties or dealers or different entities, we literally mobilised our whole service network to say ‘Let’s go move through these vehicles really quickly.”
Acknowledging that customers were frustrated by the recall, Mr Scaringe said the company made clear “that we were trying to do the best possible job we could”.
“We didn’t sugar coat it. We said we’re going to fix this.”
US-based online automotive resource Edmunds recently published an update to its long-term Rivian R1T ute review, reporting saying that the fastener recall was done by a mobile service technician and took about five minutes.
Despite an overall positive ownership perspective, Edmunds was less satisfied by a series of Rivian service notices about other potential issues.
“The list of things that might have issues include a misrouted wiring harness under the front cowl, a loose rear suspension toe link bolt, water collection in the rocker panels from heavy rain or stream fording and window mouldings that could become detached,” reported Edmunds in its 8000km R1T long-term review update.
Keyword: Glimmers of hope amid Rivian’s rocky ride