Tesla News: Stock Price Not Phased By An Easy-Fix Recall
Tesla (TSLA) voluntarily recalled some of its vehicles over the weekend due to safety issues with the driver assistance systems. It was an issue that was not exactly overwhelming for the electric car company considering it can fix the problem via a software update.
Investors weren't phased on Monday, with shares of Tesla gaining 2% in early trading.
The recall was for 285,520 total cars. It included 249,855 of its Model 3 sedans and Model Y crossovers from Shanghai, China. There were 35,665 of the Model 3 from the U.S which were imported to China that also were recalled.
Tesla called for an initiated defect investigation as soon as the problem was brought to their attention and then had officially announced its recall.
The problem involves drivers potentially switching an on or off active cruise control feature in their Model 3 or Model Y cars. The feature was said to switch on or off while making a sharp turn, and if the switch on turned on during a situation where they did not notice is could cause the car to accelerate at a time that would cause
a crash.
It was still considered an official recall because of the safety concerns, but none of the owners of the recalled vehicles will have to do anything other than updating their car.
Although the problem was easily fixed, Tesla now has been dealing with a reputation tank in China after multiple recalls and crashes.
CNBC cited Taylor Ogan of Boston-based hedge fun Snow Bull Capital, who said the recall actually helps Telsa.
“Most cars have recalls, but not all car companies can offer a software patch without making you go into the physical dealership,” Ogan said. “Would-be buyers may see this as an advantage over competitors.”
As of Monday at 2:56 p.m ET, shares of Tesla were trading at $688.03, a gain of $16.16, or 2.41%.
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