Tesla Inc.
TSLA 1.57%
recalls about 135,000 Model S luxury sedans and Model X SUVs due to touchscreen failure, one of the electric vehicle manufacturer’s biggest safety moves ever.
The move comes after the National Highway Traffic Safety Administration filed a recall last month, saying the touchscreen in some models may fail when a memory chip runs out of storage, affecting features such as defrosting, turn signals, and driver assistance.
The agency said the problem affected approximately 158,000 vehicles, including Model S sedans built between 2012 and early 2018 and Model X vehicles made from 2016 to early 2018. The recall does not affect vehicles in that group that have already been repaired with a larger memory chip or an upgraded touchscreen, according to NHTSA.
Tesla said in a letter to federal regulators publicly released Tuesday that while it did not agree that the problem was a defect in the vehicles, it went ahead with a recall to complete the investigation and provide a better experience for customers. offer.
“It is economically, if not technologically, unfeasible to expect such components to be able or to be designed to last the life of the vehicle,” Tesla said in the letter.
While the recall will be modest compared to other car safety measures, which sometimes affect millions of vehicles, the action represents a relatively large number of Teslas. Last year, according to market research firm Motor Intelligence, the company delivered approximately 500,000 vehicles worldwide, of which about 40% in the US. Tesla does not divide its sales by region.
Sam Abuelsamid, an analyst at Guidehouse Insights, estimated the recall could cost between $ 200 million and $ 250 million. Tesla did not immediately respond to a request for comment. The company’s stock was up about 1% ahead of the market.
The electric vehicle manufacturer recalled about 123,000 of its Model S cars in 2018 following a finding that some bolts had corroded in cold weather, which could lead to power steering failures.
Tesla is in a much better financial position than it was three years ago. The company has reported six profitable quarters in a row and had a total of approximately $ 19.4 billion at the end of last year. The market valuation of about $ 796 billion on Monday was higher than that of the next nine largest automakers combined, according to a Dow Jones Market Data analysis of FactSet data.
Federal regulators have said the problem with Tesla’s touchscreens could take about five to six years to manifest. Tesla has tried to use over-the-air updates to fix the problem, but those efforts were insufficient, regulators said.
Roughly 12,600 vehicles had already experienced these touchscreen problems since last summer when Tesla provided data to regulators. All touch screens in the approximately 158,000 affected vehicles would eventually fail, the regulator said it had been told by Tesla.
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The recall comes as the auto industry faces a shortage of computer chips that has disrupted production worldwide.
Tesla said it would replace hardware for free as part of the recall, but would do so in stages due to parts limitations.
Deliveries of Model S and Model X vehicles, Tesla’s higher-end offering, have recently declined. The company said last week that it is updating both models.
Write to Rebecca Elliott at [email protected]
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