Why Analyst Sees Latest Tesla Recall As A 'Positive' For The EV Maker

Tesla Inc’s TSLA latest FSD Beta software-linked recall, though “puzzling” could still turn into a "positive" for the Elon Musk-led electric vehicle maker, Loup Funds Managing Partner Andrew Murphy said Tuesday.

What Happened: Tesla is recalling a beta software feature from more than 53,822 of its Model S, X, 3 and Y electric cars in the U.S. that include a setting allowing cars to roll past stop signs.

“It was certainly puzzling why they would enable on purpose an illegal manoeuvre in a computer system. I think they are trying to recreate any human driver's natural driving habits, which is typically a slightly rolling stop,” Murphy said during a discussion with fellow analyst and Loup Funds co-founder Gene Munster. 

The rolling stop feature is available on the newer version of Tesla’s Autopilot or the beta version of the full self-driving software.

Tesla owners would not have to visit a service centre as the feature will be removed via a free over-the-air software update.

“But I think they made a mistake there and they're getting a slap on the wrist for it,” Murphy said.

The analyst said auto recalls are usually a “nightmare” for automakers because the vehicles have to be recalled to a physical location and involve cost. Tesla’s software recall is different.

“A software recall is just so much easier in the new world order where Tesla can recall software and update it automatically. It turns from what I see as a negative for Tesla into a positive: the fact that they can adjust and respond to the latest regulatory environment with a simple software update.”

See Also: Tesla's Gross Margin In Focus With Q4 Earnings As Investors Look For Apple-Like Growth Story: Munster

Musk Fires Back: Musk on Tuesday took to Twitter to say there were no safety issues linked to the electric cars. The cars, he said, only slowed down to about 2 miles per hour and continued moving if there were no cars or pedestrians in view.

He’s actually a lobbyist, not a journalist. There are many who pose as the latter while behaving like the former. No integrity.

Indeed, there were no safety issues. The car simply slowed to ~2 mph & continued forward if clear view with no cars or pedestrians.

— Elon Musk (@elonmusk) February 1, 2022

Musk was responding to a tweet that attacked a journalist for allegedly misreporting the story. The world’s richest person called the journalist a “lobbyist” in his post on the microblogging site.

Price Action: Tesla shares closed 0.58% higher at $931.25 a share on Tuesday.