Tesla Inc. on Thursday made a major announcement, recalling 362,758 vehicles due to a potential risk of crashes associated with the EV maker’s self-driving software. As a result, Tesla stock turned lower on the news, trading as low as $208.31, and at last check was down 1%.
In a recall notice, the National Highway Traffic Safety Administration (NHTSA) said that Tesla’s Full Self-Driving Beta software, meant for urban driving, may increase the risk of crashes by allowing vehicles to “exceed speed limits or travel through intersections in an unlawful or unpredictable manner.” The NHTSA also revealed that Tesla will release an over-the-air software update to remedy the issue.
Tesla had previously pushed FSD Beta to “nearly all customers in the U.S. and Canada who bought FSD,” or about 400,000, saying they would “start experiencing the evolution of AI powered autonomy.” Tesla had also raised the FSD package’s price to $15,000.
According to NHTSA, analysis and testing performed as part of the final stages of an ongoing investigation revealed that in certain situations FSD Beta “led to an unreasonable risk to motor vehicle safety based on insufficient adherence to traffic safety laws.” Tesla then launched a recall as required after discussions with the regulator, NHTSA said.
NHTSA said it still has an “open and active” investigation into Tesla’s Autopilot, the company’s suite of advanced driver-assistance systems meant for highway driving, as well as “associated vehicle systems.” In addition, Tesla had disclosed a Justice Department subpoena over Autopilot and self-driving technology earlier this month.
Tesla has long been criticized for overpromising on its vehicles’ self-driving capabilities. The EV maker’s stock had shaken off weakness earlier in the week, gaining for two straight sessions and initially rising on Thursday. The stock earlier this month notched an 8-day winning streak, leading one analyst to say it was “overextended.” Despite this, Tesla stock is down about 30% in the past 12 months, compared with losses of around 8% for the S&P 500 index.
Tesla investors are now waiting to hear more details about the company’s “Master Plan 3” to be unveiled on a March 1 investor day.
The news of the recall has caused much concern among Tesla customers and investors alike. Though Tesla has released an over-the-air software update to remedy the issue, the NHTSA has warned that this recall does not address “the full scope” of the current investigation. This means that further action may be taken in the future to ensure the safety of Tesla drivers.
The recall highlights the fact that Tesla’s self-driving technology is still in its infancy and far from perfect. It also serves as a warning to other automakers that are developing autonomous vehicles, that safety must be a top priority.
Tesla has been at the forefront of the EV revolution, and its cars have been widely praised for their performance and innovative features. However, the recall has highlighted the need for more stringent safety measures in the development of autonomous vehicles.
The recall also raises questions about Tesla’s ability to deliver on its promise of self-driving cars, and whether the company can live up to the expectations of its customers. It is clear that Tesla still has a long way to go before its self-driving technology is ready for the public.
In conclusion, the recall of 362,758 Tesla vehicles due to a potential risk of crashes associated with the EV maker’s self-driving software, has caused much concern among Tesla customers and investors alike. Though Tesla has released an over-the-air software update to remedy the issue, the NHTSA has warned that this recall does not address “the full scope” of the current investigation. This means that further action may be taken in the future to ensure the safety of Tesla drivers. The recall has highlighted the need for more stringent safety measures in the development of autonomous vehicles, and raises questions about Tesla’s ability to deliver on its promise of self-driving cars. Investors are now waiting to hear more details about the company’s “Master Plan 3” to be unveiled on a March 1 investor day.
