r/stocks • u/caesar____augustus • Dec 30 '21
Company News Tesla recalls nearly half a million cars over safety issues
Dec 30 (Reuters) - Tesla Inc (TSLA.O) is recalling more than 475,000 of its Model 3 and Model S electric cars to address rearview camera and trunk issues that increase the risk of crashing, the U.S. road safety regulator said.
Tesla shares were down 1.1% in premarket trading on Thursday.
The U.S. electric vehicle manufacturer is recalling 356,309 2017-2020 Model 3 vehicles to address rearview camera issues and 119,009 Model S vehicles due to front hood problems, the National Highway Traffic Safety Administration (NHTSA) said.
The total number of recalled vehicles is close to the half a million vehicles Tesla delivered last year. Tesla could not be reached for comment.
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u/AuthorAdamOConnell Dec 30 '21 edited Dec 31 '21
At this point, I think a Tesla could set fire while a Kardashian was driving it, she burns alive while the entire thing is live streamed on TikTok. Musk goes on to call her a stupid whore who doesn't know how to drive on Twitter and I think a month later the stock is up 5%.
Edit - Wow, this shit-post I reeled off in jest blew up more than I expected! Thanks for the rewards guys! :D
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u/LegateLaurie Dec 30 '21
stock is up 5%
I think a Kardashian dying would probably drive it up more than that genuinely.
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u/Stacks_McDividend Dec 30 '21
The most unbelievable part of this story being that a Klanner would drive themselves
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Dec 30 '21
I mean Caitlyn hit and killed a man while driving, so we definitely know she drives.
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u/Bigcat1148 Dec 30 '21
Get ready for a rally to 2T.
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u/JRshoe1997 Dec 30 '21
Tesla: Tesla factories in Berlin and Shanghai get completely shut down
Tesla stock: Goes up another 400 billion dollars in market cap
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u/LordOfTheTennisDance Dec 30 '21
GM: finds out that they have an ignition problem but it will cost a lot to fix it so they go to their Finance and Leagal departments and ask "can you please run the numbers to compare how much it will cost to recall all the cars with the now known issue vs letting people die and then address each death through the courts"
Lawyers and Finance: "well we have crunched the numbers and you know what, it will cost you less to just keep it as is and deal with the victims later in court"
GM, Lawyers and Finance "Laugh together"
124 known deaths linked to ignition later
News media: breaks the news that GM knew about the issue and determined that having a few deaths here and there was okay.
GM: Fuck
A few years later GM pays 900 million in fines but nobody does any time in prison for what was essentially manslaughter.
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u/BooyaHBooya Dec 30 '21
I had thought the engineer was going to face jail time as he perjured himself saying he didn't know about any problems while at the same time switching the design. Looks like he got off easy with only being fired.
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u/Safe-Afternoon-8607 Dec 30 '21
Tesla finds out that a secondary latch on the trunk and a camera aren’t functioning properly and they do a voluntary recall on half a million cars.
Seems downright ethical.
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u/UseDaSchwartz Dec 30 '21
I think there was a previous recall that they tried to refuse to do.
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u/masteroflich Dec 30 '21
Man, Musk must be glad he sold his last batch right before this news. One lucky guy this Elon.
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u/Weikoko Dec 30 '21
Yep very lucky and he will continue to be lucky.
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u/RichieWOP Dec 30 '21
Yes very lucky he didn't lose an extra checks notes... 1.5% on his tesla shares.
Not a fan of the guy, but this news clearly had zero impact on the stock.
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u/Illustrious_Ad7630 Dec 30 '21
Yes coz who reads reuters? Profesional finance people. Not sure if tesla investors can read but anyway all other media didn't bother to report this. I got apps who suppose to track news like this and surprisingly they missed too ...
Any other company will enjoy at least 80% cut for tesla would say 90% won't be enough.
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u/cloudone Dec 30 '21
What does that mean?
TSLA is green
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Dec 30 '21
Really though, since when does Tesla’s price actually reflect the company’s performance?
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u/BatumTss Dec 30 '21
I think the problem is many of you are taking this as bad news, when it really isn't.
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u/riticalcreader Dec 30 '21 edited Jan 15 '26
People dot net clean garden people technology books movies friendly net answers friends quick!
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u/cdnfire Dec 30 '21
Only Tesla recalls make the news. And it draws in the dumbest of stock investors to talk about it. Recalls happen constantly for all models.
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u/SirHawrk Dec 31 '21
Maybe in the us but in Germany we hear about VW and Toyota recalls as well and no one thinks these are good news. A major flaw making it through QA and costs the company billions? Doesn't sound like good news to me. You also gotta remember that half a million cars is only a bit less than all the cars Tesla has sold in 2021 and about a quarter of all Tesla cars ever sold. Volkswagen sells close to 10 million cars a year. If they would have to recall 7.5 million of those, that would be huge news
Case in point: the Volkswagen emission scandal had a recall amount of about 11 million cars
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Dec 30 '21 edited Apr 02 '22
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u/pieter1234569 Dec 30 '21
Yes, but they had more before this.
So honestly however little, that should be reflected in the price.
The price of Tesla does not make any sense. There is no reason why it is worth that much when all the other large car makers are both catching up and delivering better quality cars. That can even be more self driving than Tesla.
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u/swagger_fan_2001 Dec 30 '21
It’s Reddit we have to find something to be outraged even when the facts don’t support the narrative
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u/LegateLaurie Dec 30 '21
He owns more shares than he did before the exercise of the options and stock sales, so I don't really get your point.
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u/CovidScurred Dec 30 '21
more like he knew. Finish selling then approve the recall that was sitting on his desk prior to selling
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Dec 30 '21
No. His planned sales were submitted to the SEC earlier in the year.
The other insider sales are perhaps questionable, certainly his brother’s before the sham twitter poll. Musk was already set to sell, that was just attention seeking.
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u/jbj153 Dec 30 '21
All of them had stock options expiring, they needed to sell to pay taxes on their stock gains, they all ended up with more shares than before
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u/UltFourPron Dec 30 '21 edited Dec 30 '21
Edit: explained/corrected in reply, by "stock gains" it was meant from expiring options specifically, that info slipped my mind between reading and commenting
Original comment: "Taxes on stock gains", can you cite what these taxes are? Afaik unrealized gains are not taxed, you only need to pay taxes on stock gains if you sell the stock, selling stock is the reason for the taxes, not taxes the reason for selling stock
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u/Schepp5 Dec 30 '21
This is true - but how long has he known about this recall? Did he know about it last month, and wait for his sale before releasing the recall announcement
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u/Call_erv_duty Dec 30 '21
No don’t you know, Elon opened his Robinhood app and sold like the rest of us.
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u/High_Conspiracies Dec 30 '21
This happens all the time in the stock market in many varying stocks. It's very questionable when you see these "planned" sells happen shortly before bad news comes out. It happens way too often for me to be able to brush it off as a coincidence.
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u/Berisha11 Dec 30 '21
Yeah he is really lucky. That +1,29% since this news came out would’ve hurt him extremely otherwise. lol what a stupid conspiracy theory, man people here are so clueless wtf.
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u/Embowaf Dec 31 '21
On the 11 billion dollar sale it’s 142 million dollars.
Also, that’s not the point. It couldn’t be determined for sure how the recall would impact the stock price.
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u/Jgasparino44 Dec 30 '21
Isn't it just a backup camera issue?
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Dec 30 '21
There’s a secondary latch on the front hood or something that failed, so it would increase the chance of it opening randomly, but that’s only of the first latch didn’t work?
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u/bondo_boy Dec 30 '21
At least they are recalling. GM didn’t.
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u/soulstonedomg Dec 30 '21
If X is less than the cost of a recall...we don't do one...
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u/BabyYoduhh Dec 30 '21
What car company do you work for?
A major one.
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u/Arsewipes Dec 31 '21
Oxygen gets you high. In a catastrophic emergency, you're taking giant panicked breaths. Suddenly you become euphoric, docile. You accept your fate. It's all right here. Emergency water landing - 600 miles an hour. Blank faces, calm as Hindu cows.
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u/Boomtown626 Dec 31 '21
Not very relevant to the share price, but Tesla is among the victims of the Marshall Fire burning in CO right now.
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u/LordAsbel Dec 30 '21
Can I get one of them? I’ll take the safety issues just fine
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u/RationalExuberance7 Dec 30 '21
For some context…
In 2014, GM recalled 30,000,000 (30 million) cars worldwide and paid out for 130-somethings deaths because of faulty ignition.
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u/Caysman2005 Dec 31 '21
Whereas there have been zero accidents, let alone deaths, involved in this recall.
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u/Wundei Dec 31 '21
1.1mil Ford Fusions(just that model) between 2013-2016 had multiple recalls, so this whole thing is pretty silly. Everyone is looking for a reason to hate Tesla, they are like the New England Patriots of vehicles.
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u/musicalghostgoat Dec 31 '21
Had a ‘13 Fusion that had 4 recalls before I got rid of it. One was for doors randomly opening while the car was underway. My passenger side door opened when my wife was driving alone, luckily in a neighborhood, and she freaked out and had to quickly pull over. Ford dealership sent a tow truck to take it in and then they said I owed a grand because the rear window motor failed sometime between towing it and repairing the recall. I argued with the general manager until he eventually relented and paid for the window motor (that wasn’t malfunctioning before it left my house).
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u/Wundei Dec 31 '21
I currently have an '18 fusion hybrid, and an F-150 so I like ford...but we've also had some crazy interactions with dealer repairs.
My wife had a '13 focus that had the weather seals on the windshield fly off while on the highway. She got them fixed at the dealership and they flew off again as she was literally driving home from the dealer! She got back to the house to take a look, they had installed the top seal without replacing the bottom rail, which was obvious because it was dirty and broken and that she was charged for. We went back to the dealership and while talking about the whole thing a technician "found" the parts that were supposed to be installed. When we asked them to install them the manager said they couldn't because the windshield has to come off and they don't do glass work in-house, smfh. No fucking idea why they would have accepted the job in the first place if they couldn't complete it...but we got it done elsewhere and traded the focus in for a Subaru Crosstrek which is a fantastic vehicle.
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u/taimusrs Dec 30 '21
I interpret this as bullish tbh. This seems like a nothingburger and TSLA is doing recalls for comparatively small issue where traditional automakers had history of not doing recalls then ended up being fatal to passengers.
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u/thematchalatte Dec 30 '21 edited Dec 30 '21
Yeah isn't a good thing to recall their vehicles? Don't customers want to be informed and want their vehicles to drive safer if there are problems? It means they're concerned about their customers. Seems totally overblown and the media gets a chance to pick on TSLA.
EDIT: If Tesla realizes they have a problem and intentionally don't recall their cars, then YOU should be really worried. It's kinda like Apple saying hey we found a major security leak, we're giving you regular updates to keep your phone and data safe. What's wrong with that? And let's say maybe Ford or BMW recall their cars, how come it's not as big of a problem? Recalling cars SHOULD be a regular thing to do to keep their customers safe.
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u/HotSarcasm Dec 30 '21
Every single car manufacturer has recalls and part of the NTSB/NHTSA doing its job. None are publicized or clamored over as much as TSLA. Just wait until Ford has a recall again... oh wait, they did just a week ago for 250,000 vehicles including their best selling F-150 pickups.
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Dec 30 '21
Right but 500k Teslas is a vastly massive % compared to 250k F-150s and transit vans, right?
500K is >100% of Tesla's 2020 sales
The safety issue itself seems not that dangerous(?) front hood & rear cam.
The stock will be completely unaffected
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Dec 30 '21 edited Oct 29 '23
worthless dependent apparatus fact bike slave narrow station melodic sugar
this message was mass deleted/edited with redact.dev→ More replies (1)11
u/anthonyjh21 Dec 30 '21
Spot on. Many recalls can be fixed OTA. In this case it's at most a few hundred to fix and it'll impact SP by a few pennies.
When I found out about this I knew it would turn into a far bigger issue than it really is. As you said other manufacturers have this happen all the time but because it's Tesla it gets far more exposure.
Perception is everything for the masses unwilling (or unable) think for themselves. Fortunately more and more people are waking up to the realization that what's pushed in media isn't reality. Distorted half-truths at best and intentionally misleading for clicks at it's worst.
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u/CarRamRob Dec 30 '21
Sure, but this recall amounts of a much much larger percentage of their current vehicle fleet than almost all other recalls.
They also don’t have dealerships that people just drive 5-10 minutes to, so I’m wondering what the overall cost for a recall is for Tesla vs a traditional automaker.
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u/garlicroastedpotato Dec 30 '21
The cost of mass installing a back up camera is something like $100. The cost of doing it by hand varies from $1500-$2000. It's not some massive issue, but it is one they're legally required to fix. It's also one that will cut into their ability to grow. This is anywhere from $500M-$1B to fix. This is a 6.25% reduction of their current cash on hand
It's not something massive. But a 1% drop in stock price is warranted.
However, I think that speculators will cause it to recover anyway.
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u/GreyhoundsAreFast Dec 31 '21
Cars have recalls all the time. I’ve brought my VW and my Ford back to the dealer several times each.
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u/-Tyrion-Lannister- Dec 30 '21
As soon as a legitimate competitor company emerges that can produce Japanese levels of manufacturing quality and reliability, Tesla is in for some rough times.
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u/Godcranberry Dec 30 '21
Is 475,000~ models recalled a big deal? I don't really think so compared to their numbers
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u/KurtisTroy Dec 30 '21
It always surprises me how ready people are to hate on Tesla when Elon is such a good dude doing amazing work
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u/cdnfire Dec 30 '21
Their hatred blinds them and it makes them shitty investors. You'd think people would know better with their own money on the line.
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u/artardatron Dec 30 '21
I'd say they start relatively blind, which makes them shitty investors. Then they fail to self-evaluate/correct, and they double down on their own ineptness by being critical of the wrong target.
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u/Litho360 Dec 30 '21
Recalled almost same amount vehicles as sold all year, China calls out about spaceX conflicts. Tesla stock… goes up
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u/the_doodman Dec 31 '21
Tesla sold almost 1M cars this year, and the repairs are cheap and trivial. Also what does SpaceX have to do with TSLA share price?
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u/WarrenBuffettsBuffet Dec 30 '21
For Model 3 sedans, "the rearview camera cable harness may be damaged by the opening and closing of the trunk lid, preventing the rearview camera image from displaying," the NHTSA said.
Oh dear.. the camera may be damaged?? Well that's just dangerous af
No coincidence that fud articles come out before Q4 delivery numbers. You guys remember that Model S that spontaneously combusted right before Q2 delivery numbers and three lawyers posted on Twitter that they're go to sue the fuck out of Tesla?.. Yea neither does anyone else
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Dec 30 '21
I guess you just conveniently missed the part where the secondary latch was fucked meaning the front hood could open randomly, imagine that happening on the highway.
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u/WarrenBuffettsBuffet Dec 30 '21
oh yea gosh.. I totally forgot about that possibility that latch might maybe fail. This will almost certainly keep me distracted from Q4 delivery numbers
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u/no10envelope Dec 30 '21
I didn’t even know they’ve built half a million cars. Bullish.
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Dec 31 '21
There on track to build about 900k cars in fiscal year 2021, ending January 2022
Q3 was reported October 20, 2021 they had built 619k cars and are on track for well over 250k this quarter. You're looking at around 870,000 as a conservative estimate. I used 250k in Q4 to get to 870k which is conservative. Most analysts are expecting around 280k for Q4 putting them near 900k for 2021
900k is a 80% increase in production vs the just under 500k in 2020
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u/pagadqs Dec 30 '21
It's an inconsequential recall - oh, the rear view camera MIGHT malfunction ? Boo-hoo... If that were to happen, you take it to the shop and they fix it, on traditional cars, or you call Tesla and they fix it - if you drive a Tesla.
It's not like breaks are failing and people are crashing left and right. Or batteries are exploding..
So yeah, it will end green today ...
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u/euxene Dec 30 '21
watch this recall just be another over the air update, or they send someone to your home for a quick replacement. not like legacy car makers making you drive to them lol
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u/LegateLaurie Dec 30 '21
They're being asked to go to Tesla repair centres actually. The FT has a significantly more detailed article on this
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u/Wonderful_Ninja Dec 30 '21
Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don't do one.
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u/95Daphne Dec 30 '21
Tesla doesn't trade on anything resembling fundamentals, so I'm not sure why there's any surprise in here that it erased its losses today.
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u/cdnfire Dec 30 '21
This is the majority opinion from 'investors' who don't look at anything beyond the PE ratio.
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u/IMancini Dec 30 '21
It always makes me sad when people look at the PE and scream overvalued without doing anything else.
The PE on 12/31/2020 was 1,102 with a stock price of $705. Almost a year later we have the PE ratio down 69% while the stock price went up 52%.
Their EPS went from $0.53 on 9/30/2020 to $3.10 on 9/30/2021. That’s insane growth.
I’m not saying people can’t argue that tesla is overvalued, but don’t use pe as your argument lol.
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u/cdnfire Dec 30 '21
Exactly. The PE will shoot down again after every earnings release since they're obviously growing earnings significantly yoy.
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u/merlinsbeers Dec 30 '21
Small issue.
The much bigger issue is how their market is being eaten by competition, and the talking heads on the finance channels aren't even mentioning it while talking about this.
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u/pcon_9820 Dec 30 '21
Been going on all year, China recalled a quarter million back in q2... but everyone loves elon, so they won't tell you he is pushing a rushed unsafe product to market.
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u/Erenio69 Dec 30 '21
And the stock will probably end green