On Thursday, the National Highway Traffic Safety Administration (NHTSA) made the announcement that Tesla (NASDAQ:TSLA) would be recalling 362,758 vehicles due to potential safety issues involving the Full Self-Driving (FSD) beta software.
Tesla Stock Price Decline
The Tesla stock price dropped immediately after the announcement, but by midafternoon on Thursday, it had recovered some of those losses to trade down by only about one percent. Tesla stock fell 1% to $212.20 in Thursday market trading. On Wednesday, shares had advanced 2.4%. Since reaching a bear market low of $101.81 on January 6, Tesla stock has increased by approximately 108%.
In the recall notice issued by the NHTSA, it was stated that the experimental FSD beta software that Tesla uses “may allow the vehicle to act unsafe around intersections.” This could include driving straight through an intersection in a lane that is only designated for turning or driving through a stop-sign-controlled intersection.
It is also stated in the notice that the FSD beta system might not react to changes in the speed limits that are posted or “might not adequately account for the driver’s adjustment of the vehicle’s speed to exceed posted speed limits.”
According to the NHTSA, a collision may occur as a result of these flaws in Tesla’s FSD beta if they are not fixed. According to a statement issued by the National Highway Traffic Safety Administration (NHTSA), “Tesla initiated a recall to repair those defects as required by law and after discussions with NHTSA.”
According to the NHTSA, the recall will involve specific models of the Model S and Model X automobiles manufactured between 2016 and 2023, as well as the Model 3 automobiles manufactured between 2017 and 2023, and the Model Y automobiles manufactured between 2020 and 2023.
In response to the NHTSA’s raised safety concerns, Tesla has announced that it will issue a software update that can be downloaded remotely. There was no additional information provided about how the OTA recall would address the aspects of FSD beta that were causing the unsafe behavior of the vehicle.
Elon Musk, CEO of Tesla, took to Twitter, the social media platform where he is also CEO, to complain about the use of the term “recall.” This is an official term used by the NHTSA to repair defects in vehicles, even when the remedying action is an OTA update. Musk took issue with the use of the term “recall,” which is an official term used by the NHTSA to repair defects in vehicles.
Despite this, Tesla is mandated by law to publicly announce a recall of its products.
According to the National Highway Traffic Safety Administration’s (NHTSA) official statement regarding the FSD recall, “Every motor vehicle manufacturer in the United States has the same responsibility to identify and immediately repair, for free, such safety defects in their vehicles.” “Manufacturers are required to initiate a recall for any repair, including an update to the software, that eliminates an unreasonable risk to safety.”
The FSD software is an optional upgrade for Tesla vehicles that costs $15,000 and can be added by owners if they already possess the required hardware. Owners must have a high-driver safety score, as determined by Tesla’s own driver-monitoring system, in order to be eligible for participation in the FSD beta program. This score is used to determine eligibility.
The NHTSA is currently conducting an investigation into Tesla in relation to collisions that have taken place involving Tesla vehicles at accident scenes with emergency vehicles while operating under FSD. There are also rumors that the Department of Justice is looking into Tesla’s claims regarding the capabilities of FSD.
Featured Image: Unsplash @ Tesla Fans Schweiz