Tesla, Inc. TSLA shares have been locked in a lackluster phase since mid-May, and the recent headlines about multiple recalls couldn't have come at a worse time.
The Latest Stateside Tesla Recall: Regulators in the U.S. and China announced fresh recalls of Tesla vehicles over quality issues on Thursday.
Tesla will recall 5,530 vehicles that include 2018-2020 Model 3 and 2019-2021 Model Y cars in the U.S., Reuters reports, citing a filing by the company with the National Highway Traffic Safety Administration.
The recall was to address the issue with fasteners that secure the front seat shoulder belt to the B-pillar.
Tesla is also recalling 2,166 Model Y vehicles from 2019-2021, citing improper attachment of fasteners that secure the left and right second row seat belt retractors.
This comes on top of the recall Tesla announced Wednesday of 6,000 2019-2020 Model 3 vehicles and 2020-2021 Model Y vehicles due to the possibility of the brake caliper bolts being loose.
The loose caliper bolts, the company said, could allow the brake caliper to separate and contact the wheel rim, potentially causing a loss of tire pressure in rare circumstances.
Tesla's Recall In China: Tesla is also facing a similar predicament in China, its key market. In a filing with China's State Administration for Market Regulation Thursday, the company said it is recalling over 700 imported Model 3 EVs sold in China.
About 311 vehicles have been recalled due to seat belt issues that poses the threat of injury to passengers in the event of a collision.
The company is also recalling 423 card due to loose bolts that cause tire pressure to drop.
Related Link: Chinese Military Restrictions Show Tesla Caught In Middle Of US, China Relations: Wedbush
The Context For Tesla: Tesla, thanks to its early start, has had the lead in EV sales. The company, however, cannot be complacent, given the increasing competitive threat in the arena. The quality issues could mar its brand appeal among customers.
Tesla's global market share slipped from 29% in March to 11% in April, the Bloomberg reported, citing Credit Suisse analyst Dan Levy. The analyst reportedly blamed the predicament on new competition and the company's recent price hikes.
The company is also facing a setback in China, as its sales fell 27% month-over-month in April, according to data released by the China Passenger Car Association. Tesla's share of the Chinese market also shrank from 21% in March to 17% in April.
The weakness in China is due to a confluence of factors, including recent customer protests against the company due to problems with its vehicles and the Chinese government banning its vehicles from military premises due to fears that the cameras onboard could be used for spying.
TSLA Price Action: At last check, Tesla shares were down 3.45% at $584.26. The stock has traded down for four consecutive sessions.
Related Link: Tesla Fares Worse Than Overall EV Market In April In China, Deliveries Drop 27% Over Previous Month
Photo courtesy of Tesla.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
