Tesla To Refund Older Model S, X Owners For MCU Failures: CNBC

Tesla Inc TSLA will refund owners of older Model S and X electric vehicles for out-of-pocket repair costs paid by them for main computer failure, CNBC reports. 

What Happened: The main computer (MCU) in Tesla powers the touchscreen allowing drivers to control entertainment, navigation, air conditioning, and other vehicle features.

The memory devices in some Tesla MCUs have a limited "write cycle," which means they will stop working after it hits a specific number of programs or erase cycles, CNBC noted.

The failure of the MCU renders a blackout to touchscreens — making the car mostly useless. The problem affected older Model S and X vehicles built until 2018.

In an email to owners of such vehicles, Tesla said that it would refund the repair expenses for MCU failures paid out-of-pocket by the users.

The Elon Musk-led company will also extend the warranty to provide no-cost repairs to users experiencing a malfunction at any Tesla service center for eight years or 100,000 miles from the initial delivery date.

CNBC reports that Tesla used similar components in 159,000 vehicles, including Model S sedans built from 2012 to 2018 and Model X SUV's made from 2016 to March 2018.

In 2018, Tesla shifted from the MCU-1 system using NVIDIA Corporations's NVDA Tegra 2 and Tegra 3 processors to 4GB or 8GB eMMC NAND flash memory devices made by SK Hynix.

Why It Matters: The refund and extension of conditional warranty will help Tesla prevent a proposed class-action lawsuit. 

In June, the National Highway Traffic Safety Administration opened an investigation into 63,000 Tesla Model S cars on MCU failures reports.

Price Action: Tesla shares traded 0.23% lower at $420.31 in the pre-market session Tuesday.

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