Regulators Urge Tesla to Recall Around 158,000 Vehicles -- Update
January 13 2021 - 8:47PM
Dow Jones News
By Rebecca Elliott and Ben Foldy
Federal regulators are asking Tesla Inc. to recall about 158,000
vehicles over safety concerns in what would amount to one of the
biggest safety actions by the electric-vehicle maker.
The National Highway Traffic Safety Administration asked Tesla
in a Jan. 13 letter to recall some Model S luxury sedans and Model
X sport-utility vehicles. NHTSA asked for the recall because the
cars' touch screens can fail after a few years of use, affecting
safety functions such as defogging and back-up cameras.
Some car safety recalls run into millions of vehicles. Though
modest by historic numbers, the action would represent a relatively
large recall for Tesla, which has far fewer cars on the road than
some rivals. The Silicon Valley car maker delivered nearly 500,000
vehicles globally last year, roughly 205,600 of them in the U.S.,
according to market-research firm Motor Intelligence. Tesla doesn't
break out its sales by region.
Tesla doesn't have to recall the vehicles, though NHTSA said in
the letter that if the car maker doesn't take the action it has to
provide an explanation for its decision. The agency can then
escalate the matter to a public hearing and eventually seek to
force a recall through the courts.
Sam Abuelsamid, an analyst at Guidehouse Insights, said the
recall request was significant and could cost $300 million to $500
million to address.
Tesla in 2018 recalled 123,000 Model S cars over a finding that
cold weather could corrode some bolts, potentially leading to
power-steering failures.
Tesla's stock has been flying high in recent months, boosted by
growing investor confidence in Chief Executive Elon Musk's vision
of the mass-appeal of electric cars. Tesla last year became the
world's largest car maker by market capitalization and this month
became America's fifth largest public company. The company's stock
is up more than 700% over the past year.
NHTSA's latest recommendation would affect Model S cars built
between 2012 and 2018 and Model X SUVs made from 2016 through 2018,
the agency said.
Regulators say the car's console touch screen, known as its
media control unit, can fail when its memory chip runs out of
storage capacity. That can happen over time, NHTSA said, as drivers
turn on the vehicle. It would take about five to six years on
average for the fault to occur, the regulator has determined.
When the touch screen fails, it affects vehicle functions such
as defrosting, the driver assistance system and turn-signal
functionality, NHTSA said.
The regulatory agency said that Tesla has tried to rectify the
issue through over-the-air updates, but it believes the efforts
were insufficient. As a matter of federal law, vehicle
manufacturers are required to conduct recalls to remedy
safety-related defects, the agency said.
The request to recall around 158,000 cars for an issue linked to
its computer chips comes as the auto industry struggles with a
broad shortage of semiconductors that has been disrupting
production world-wide.
Tesla didn't immediately respond to a request for comment. Mr.
Musk has emphasized Tesla's focus on safety and complained in the
past that the company receives outsize attention for incidents that
other auto makers also face.
In its letter to Tesla, federal regulators said other
manufacturers had issued recalls for issues similar to those caused
by the failing touch screens.
As part of the agency's investigation, NHTSA said Tesla provided
data showing that roughly 12,600 of its cars already had
experienced the problem, with models made between 2012 and 2015
having a failure rate around 15%. The company also confirmed to the
regulator that all of the touch screens eventually would fail, the
letter said.
Write to Rebecca Elliott at rebecca.elliott@wsj.com and Ben
Foldy at Ben.Foldy@wsj.com
(END) Dow Jones Newswires
January 13, 2021 20:32 ET (01:32 GMT)
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