Tesla Recalls Giga Shanghai-Made Model Y Vehicles: What You Need to Know

Tesla Inc TSLA continues to be haunted by quality issues, which are marring an otherwise stellar year for the electric vehicle maker.

What Happened: Tesla is recalling 21,599 units of Model Y vehicles manufactured at its Giga Shanghai plant between Feb. 4 and Oct. 30, China State Administration For Market Regulation (SAMR) said Friday. The company has filed a recall plan with the regulator, it added.

SAMR stated the recall was due to the strength of the front and rear steering knuckles not meeting design requirements. While using the vehicle, the steering knuckle becomes deformed or broken and under extreme stress, this could lead to the suspension link falling out of the steering knuckle.

This affects driving control of the vehicle and increases the risk of collision accidents, thereby posing safety hazards, the agency said in a statement posted on its website.

As a remedial measure, Tesla Shanghai will inspect the affected vehicles and replace the steering knuckles, which did not meet the required strength.

Why This Is Important: Tesla faced a backlash in China earlier this year due to brake issues with its vehicles. Demonstrators protested against the company at the Shanghai Auto Show. Since then, Tesla stands vindicated and the protester was found to have made false claims.

In the U.S., Tesla is a subject of a probe by the National Highway Traffic Safety Administration, with the agency initiating an investigation into Tesla's Autopilot having issues with recognizing parked emergency vehicles.

Tesla has also been plagued by multiple recalls this year, both in China and the U.S. Such negative press could be a long-term negative for the company as competition in the EV arena heats up.

TSLA Price Action: Tesla shares were down 3.24% at $1,049.11 Friday morning at publication.

Photo: Courtesy Tesla Inc.

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