After plunging to new bear-market lows, the stock market didn't look likely to bounce back on Monday morning from a horrible performance last Friday. Declines for the Dow Jones Industrial Average (^DJI -0.49%), S&P 500 (^GSPC 0.09%), and Nasdaq Composite (^IXIC 0.65%) seemed likely to be small, but investors still didn't get the signs of a bottom that they've wanted to see for months now.

Auto stocks were some of the highest-profile decliners in premarket trading on Monday, with Rivian Automotive (RIVN -2.10%), Ford Motor Company (F -1.06%), and General Motors (GM -1.42%) all seeing sizable losses. With electric vehicle (EV) stock Tesla (TSLA -1.41%) managing to hold its own, it's clear that competition in the quickly evolving industry is getting fierce, and companies will have to work hard in order to keep up with the pace of innovation and shifting consumer demand.

Rivian makes massive recalls

Shares of Rivian Automotive were down more than 8% before the opening bell on Monday. The EV challenger has tried to keep up its pace of production, but it saw a setback late Friday that could jeopardize its near-term financial performance.

Rivian said on Friday that it would recall 13,000 vehicles, which represents a sizable portion of the EVs it has produced in the first nine months of 2022. The issue Rivian identified involved a fastener that connects various components in the steering system. According to Rivian, insufficient tightening could allow the fastener to loosen enough that drivers would no longer be able to control the vehicle.

The news comes less than a week after Rivian had tried to encourage its shareholders with solid production figures. The company built 7,363 vehicles in the third quarter, bringing its year-to-date total to more than 14,300. Rivian also projected that it would be able to meet its 25,000 unit production goal for the full 2022 year, implying a considerable ramp-up in capacity for the fourth quarter.

After having debuted at $78 per share and opened well above $100, Rivian's stock has fallen sharply since its November 2021 initial public offering. Setbacks like these will only force investors to be even more patient in hopes of seeing Rivian's business take off in the years to come.

Wall Street doubts Ford, GM

Meanwhile, shares of major automakers were also down, with Ford falling 5% and General Motors seeing a 4% drop. Analysts on Wall Street reined in their views of the two iconic American car giants amid rising competition.

Ford got a downgrade from analysts at UBS, who cut their rating on the automaker from neutral to sell. UBS reset its target price on the stock lower by $3 to $10 per share. The bearish argument for Ford asserted that Ford's key performance metrics were the weakest among U.S. automakers, making it more vulnerable than its peers to a potential recession. Moreover, Ford's business in Europe faces even tougher headwinds due to heightened macroeconomic pressures there. Even with price increases on vehicles like the electric F-150 Lightning, it could prove difficult for Ford to withstand the forces pushing down its stock.

Meanwhile, General Motors got a slightly more favorable view from UBS, but it still got downgraded from buy to neutral and saw its target stock price cut to $38 per share, an $18-per-share drop. Despite having better momentum on the EV front than Ford, GM still faces the threat that even as it clamors to build up inventories of key parts and components, falling demand could leave it having to discount its vehicles in order to clear dealer lots.

As Tesla bulks up its production capacity, many investors believe it could achieve the once-unthinkable goal of surpassing established automakers in the next several years. That's still a tall order, but with ongoing execution woes, neither Ford nor GM has been able to answer the call fully to defend their leadership positions in the auto space.