Shares in electric vehicle maker Rivian Automotive (RIVN) revved higher today despite being forced to issue a recall of thousands of its vehicles because of a software error.
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Older Systems
The U.S. National Highway Traffic Safety Administration (NHTSA) said Rivian was recalling 24,214 R1S and R1T electric vehicles due to a software defect that may cause its hands-free Highway Assist system to misidentify lead vehicles.
The issue affects certain 2025 Rivian vehicles running an older software version in the United States, the NHTSA said.
However, drivers and investors, shouldn’t be too concerned as Rivian has issued an over-the-air software update to fix the problem.
The defect was identified after an incident involving a 2025 R1S model vehicle, where the system misclassified a low-speed vehicle and the driver failed to maintain control.
It is an important issue for Rivian given the intense competition in the sector. Automakers have increasingly competed to roll out advanced driver-assistance features like lane-keep assist and adaptive cruise control.
Rivian has also been working on hands-free and “eyes-off” systems as part of its push into autonomous driving technology.
Recall History
This isn’t, however, the first recall of Rivian vehicles.
Back in February, it issued a recall for 17,260 of its electric vehicles over issues with headlights that increase the chance of a crash. The company noted that this recall concerns its 2025 R1S SUV and R1T pickup truck EVs.
The issue behind the Rivian recall was the low beams on affected EVs potentially not turning on when the vehicle is started in cold weather.
At a difficult time for the auto industry given tariff uncertainty and faltering consumer confidence, this spate of recalls is an unwelcome hit to brand reputation.
It is why legal and regulatory issues are such a key risk for auto companies and their investors – see below.
It appears that the NHTSA is ramping up its efforts to improve safety and transparency in the auto sector. It is also keen to respond faster to customer complaints.
Other manufacturers to be hit with recalls this year include Honda (HMC), General Motors (GM) and Stellantis (STLA).
Is RIVN a Good Stock to Buy Now?
On TipRanks, RIVN has a Hold consensus based on 7 Buy, 12 Hold and 3 Sell ratings. Its highest price target is $21. RIVN stock’s consensus price target is $13.89, implying a 0.57% downside.
