Amid Stock Slide, Tesla Issues Largest Recall to Date

Tesla’s once sky-high share price has taken a serious hit in recent days, so news of the electric automaker’s recall of 123,000 Model S vehicles couldn’t have come at a worse time.

Describing the recall as voluntary, Tesla sent emails to owners of all Model S electric cars built before April 2016 to warn of an issue affecting the car’s power steering system. The issue involves corrosion impacting the bolts holding the power steering motor to the rack, which can then shear off — leading to a loss of power steering.

The automaker claims it noticed the issue in vehicles operating in cold climates, with calcium and magnesium road salts playing a role.

“Tesla plans to replace all early Model S power steering bolts in all climates worldwide to account for the possibility that the vehicle may later be used in a highly corrosive environment,” the automaker said in its email.

“If the bolts fail, the driver is still able to steer the car, but increased force is required due to loss or reduction of power assist.”

In this case, Bosch supplied Tesla with the affected parts. The issue seems identical to a problem reported last October by a Tesla Motors Club forum poster from Massachusetts, who reported his car’s steering woes to the automaker. The poster wasn’t too pleased when Tesla got back to him, quoting him a price for a new steering rack ($1,920).

After taking the vehicle into a Tesla service center, the poster said, “[The technician] said he’s seen this quite often. Sometimes the assist motor is just hanging there.”

As we said, the recall comes at a bad time for Tesla. The company is pulling out all the stops to reach its already pushed-back Model 3 production goal, even going as far as calling up workers from the Model S and X assembly lines to voluntarily work on the smaller sedan. Bloomberg reports CEO Elon Musk attempted to fire up his factory’s workforce with an appeal to prove the “haters” wrong. (The Reddit-like language is very apropos.)

Musk told workers that hitting a Model 3 output of 300 vehicles per week at its Fremont, California plant would represent an “incredible victory.”

After Musk’s promise of reaching 5,000 Model 3s per week by the end of 2017 came and went, the CEO pushed the goalposts further back. The company’s goal is now a production rate of 2,500 Model 3s per week by the end of the first quarter of 2018. So, right now. The 5,000 target still stands for the end of June.

In the last two-and-a-half weeks, Tesla has seen its stock slide 23 percent. At the close of trading Thursday, Tesla shares stood at $266.13 — a major comedown from a peak of $383.45 in June of 2017.

[Source: CNBC] [Image: Tesla]