Vehicles Recall Continues Unabated: Tesla, No Exception

Per Fox Business, Tesla, Inc. (NASDAQ:TSLA) has announced to voluntarily recall 123,000 of its luxury Model S sedans across the globe to fix the issue of faulty steering components.

The Palo Alto, CA-based company stated that the recall includes Model S vehicles built before April 2016 and is devoid of any Model X or Model 3 versions. The company explained that it has detected ‘excessive corrosion’ in the power steering bolts of the recalled vehicles. This glitch might result into reduced power steering.

The electric vehicles (EV) maker will repair the damages by replacing the specific bolts in the power steering component. The company has also intimated its plans to contact the affected customers directly for scheduling an appointment once the parts are available in their respective regions.

However, the recent recall has further added to Tesla’s woes, which is already grappled with several challenges, particularly with respect to the production of Model 3 sedan, the low cost EV targeting the mass market.

However, the company has faced intense pressure of late, regarding its multiple delayed production targets for its newest Model 3 sedan. Importantly, manufacturing of the Model 3 is critical for Tesla’s continued dominance in the EV space as it also encounters competition from the traditional auto makers namely General Motors Company (NYSE:GM) , Ford Motor Company (NYSE:F) and Toyota Motor Co. (NYSE:TM) .

Recall: An Industry Wide Issue

Recalls issued by Tesla is not a remote industry affair. In fact, several auto biggies across the globe have been embroiled in recall cases. Very recently, Ford has announced recalling around 1.38 million Fusion and Lincoln MKZ vehicles in North America, per a Reuters news. Concerns over potentially loose steering wheel bolts have prompted these recalls.

In mid-January 2018, Per Associated Press, Honda Motor Corporation (NYSE:HMC) informed to recall around 465,000 vehicles in the United States including Honda and Acura models. This safety-related announcement is part of last year’s extended recalls due to defective Takata air bag inflators.

Toyota was also in news for recalling an additional 601,300 vehicles on flawed Takata airbags. The recalled models comprise Toyota and Lexus cars. Additionally, Hyundai and BMW have issued recall cases this year.

While both Honda and Toyota sport a Zacks Rank #1 (Strong Buy), General Motors carries a Zacks Rank #2 (Buy). You can see tZacks Investment Research

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Written By: Zacks Investment Research