Newly completed Tesla Model Y electric cars stand at Tesla’s new factory in Germany.
Sean Gallup/Getty Images
Tesla is recalling another 590,000-plus vehicles, but the issue is another Tesla-style one. No cars need to go into the shop.
The recall addresses an problem where the Boombox feature, used to broadcast sounds outside the car, blocks a warning signal to pedestrians. It affects 2020 to 2022 Model Y, Model X and model Model S vehicles as well as 2017 to 2022 Model 3 vehicles.
The fix appears relatively easy: An over-the-air software update that will disable the Boombox function when the car is in drive, neutral, and reverse, as well as when the vehicle is being summoned by its driver. (Some vehicles can be summoned using the Tesla app. It’s another driver assistance feature the company offers.)
Tesla (ticker: TSLA) bulls argue that these types of recalls shouldn’t be termed recalls in that cars don’t have to go into a shop. But that really isn’t for Tesla, or any other auto maker, to decide. Recalls are managed by an existing process with the National Highway Traffic Safety Administration, or NHTSA.
Recall is, essentially, the term the industry uses to signal a safety issue that needs correcting after a vehicle is on the road. Even software-related issues meet that definition, though not every recall poses the same threat to safety.
Neither Tesla nor the NHTSA immediately responded to a request for comment.
So far in 2022, Tesla has issued eight recalls affecting more than 2 million vehicles. That is a lot, but six of the eight, accounting for the vast majority of all the units affected, involved software updates. The other two recalls, related to air bags, affected fewer than 8,000 vehicles.
Ford Motor (F), for comparison, has issued 20 recalls affecting more than 2.1 million cars in 2022.
Tesla stock isn’t trading Friday because U.S. markets are closed. The shares dropped 3.9% in the holiday-shortened week. The S&P 500 and Nasdaq Composite Index fell 2.1% and 2.6%, respectively.
Tesla stock was also weaker than shares of other car makers. For the week, General Motors (GM) and Ford Motor (F) shares rose 2% and 2.9%, respectively.
The EV maker’s underperformance makes sense. Tesla’s factory in Shanghai remains shut down because the city is trying to deal with new outbreaks of Covid-19. The production halt is costing the company potentially 2,000 to 3,000 vehicles a day, so Wall Street analysts’ forecasts of vehicle deliveries for the second quarter are beginning to fall. Currently, Wall Street projects about 327,000 deliveries, according to FactSet, compared with about 350,000 at the start of the month.
Then there is Twitter (TWTR). Elon Musk has bid to take the social- media platform private, so investors have begun to consider what running another big company would mean for the Tesla CEO’s focus on making cars.
Write to Al Root at allen.root@dowjones.com
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