Tesla (TSLA) Recalls 125K Vehicles to Fix Warning System
Tesla TSLA is recalling more than 125,000 vehicles over an issue with a seat belt warning system that may increase the risk of injury in a collision.
Per the National Highway Traffic Safety Administration (NHTSA), the recall affects certain 2012-24 Model S, 2015-24 Model X, 2017-23 Model 3 and 2020-23 Model Y vehicles. The seat belt warning system is designed to provide audible and visual signals to alert drivers when their seat belt is not fastened. Per federal vehicle safety standards, the visual warning must last at least one minute and the audible warning must last at least four seconds.
However, the NHTSA found that in some vehicles, these signals were not activating as required, failing to comply with federal safety standards.
Tesla has identified 104 warranty claims potentially related to this issue but has not reported any collisions, fatalities, or injuries. The automaker will deploy an over-the-air software update in June to address the issue. This update will modify the system to rely solely on the driver seat belt buckle and ignition status to activate the seat belt reminders instead of its dependence on the driver seat occupancy switch.
Owners of the affected vehicle will receive a letter in the mail by Jul 27, 2024.
This recall follows another recent recall in May, where Tesla recalled 3,878 Cybertrucks due to a potential issue with the accelerator pedal sticking, which could lead to unintentional acceleration and increased crash risk.
In February, the NHTSA recalled nearly 2.2 million Tesla vehicles in the United States because some instrument panel warning lights were too small. Additionally, the NHTSA upgraded a 2023 investigation into Tesla's steering issues to an engineering analysis, moving closer to a potential recall.
In April, the NHTSA began investigating whether a previous recall of Tesla’s Autopilot driving system adequately ensured that drivers remain attentive to the road.
Tesla’s latest recall marks the second-largest recall by an automaker in the United States this year, trailing only Ford, which has recalled more than three million vehicles across 26 separate recalls.
Zacks Rank & Key Picks
TSLA currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Blue Bird Corporation BLBD, Oshkosh Corporation OSK and Geely Automobile Holdings Limited GELYY. While BLBD and OSK sport a Zacks Rank #1 (Strong Buy) each, GELYY carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.29% and 155.14%, respectively. The earnings per share (EPS) estimates for 2024 and 2025 have improved 63 cents and 69 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for OSK’s 2024 sales and earnings suggests year-over-year growth of 9.86% and 11.92%, respectively. The EPS estimates for 2024 and 2025 have improved 12 cents and 10 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for GELYY’s 2024 sales suggests year-over-year growth of 36.6%. The EPS estimates for 2024 and 2025 have moved up 21 cents and 34 cents, respectively, in the past 30 days.
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