Tesla China to recall 200k vehicles in addition to the 475k recalled yesterday in the USA.
Why Tesla must recall nearly a half-million cars according to NHSTA....
Tesla is down $20billion in pre-market trading due to the recent news. However long-term tesla investors shouldn’t be worrying.
The news specifically is:
Tesla Inc is recalling over 475,000 Model 3 and Model S electric cars, the U.S. safety regulator said.
For Model 3 sedans, rearview cameras mounted on these units might malfunction, increasing the risk of a crash, the U.S. National Highway Traffic Safety Administration (NHTSA) said
To Quote Gary Black, the Managing Partner of the The Future Fund LLC;
This is noise everyone. It’s an insignificant cost unless you think $TSLA will have a similar size recall each year that can’t be solved with a software update. The investment focus should be on strong 4Q deliveries and production on Sunday.
The cost of this recall on the share price is a one-time impact of: 475K x $200 x (1 - 15% TxRt) / 1.15B FD shares = $.07/share. If the cost is $500/vehicle to repair, the impact to the stock price is $.17/share.
So again this is a shame, but not something to be worrying about if you’re a long term Tesla shareholder.
UPDATE // DECEMBER 31ST ————————
Tesla China to recall extra 200,000 vehicles
Yesterdays recall affects about 119,000 Model S sedans in the US and it involves a potentially misaligned front trunk (frunk) latch that can result in the hood opening when driving.
Now China’s State Administration for Regulations announced that Tesla is also recalling 19,697 Model S vehicles imported into the country for the same problem
China’s State Administration stated: “Vehicles within the scope of this recall may have a situation where the front trunk latch and the lock catch are aligned slightly behind. Although this situation does not affect the locking of the primary latch, it may affect the locking of the secondary latch. . When the primary latch is accidentally released, if the secondary latch is not locked, the front trunk lid may suddenly open while the vehicle is driving, affecting the driver’s line of sight, increasing the risk of a collision, and posing safety hazards.”
In the USA there was another recall of about 300k Model 3’s built between 2017 and 2020 which had a rear-view camera issue. In China this issue is also now being noticed in 36k imported Model 3’s and around 144k Model 3’s built at Tesla’s Gigafactory in Shanghai
Tesla is notifying the affected owners. It will check each car and fix the latch or rear camera harness if needed. This is a relatively simple fix and is quite inexpensive to fix too. However, the volume of recalls is worrying as its putting a great strain on Tesla’s already busy service team.
STAY UP TO DATE ON THIS STORY:
Thanks for reading Tesla Folder! Subscribe for free to receive new posts and support my work.