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Following the latest news, Tesla (TSLA) stock closed Wednesday with a 3% fall. The dip continued during Thursday’s pre-market.
Tesla Inc (NASDAQ: TSLA) has recalled a total of 734 of its Model 3 cars imported to China according to a recall plan cited by the State Administration for Market Regulation (SAMR) on Thursday. A market regulator from the central government said that the cars, produced in 2019, were recalled due to defects in their seat belts and tires.
Multiple complaints of brake failures and resultant collisions have been reported by consumers and in media reports in the past few months. The cars were found to have seat belt problems which could significantly increase risks following a collision, said the regulator. Some components of the seat belt may not have been tightened to the requisite standard.
Additionally, their tires had loose bolts which increased the risk of road accidents. All these defects have brought the electric car company under high scrutiny from China’s regulatory body.
Tesla made a statement regarding the recall saying that car owners of the model in question would be notified about these issues. Car inspections and any repairs made will be free. Tesla is yet to make further comments on the latest news of their recall.
In 2019, the US-based electric car company opened a branch in Shanghai. Thereafter, Model 3 cars manufactured at the branch were distributed to customers between 2019-2021 and, and additional Model Y cars were distributed between 2020-2021.
Tesla has been ranking third among the top sellers of electric cars in mainland China. The company has managed to outdo start-ups such as Nio whose cars sold at similar prices to those of Tesla. In recent months, however, the Wuling Hongguang Mini EV, marketed as a budget car, has taken first place.
Tesla Cars and TSLA Stock
Tens of thousands of Tesla cars have been recalled from the US and China in the past couple of months due to various problems.
In 2018, the company voluntarily recalled over 120,000 Model S vehicles due to faults in the power steering. Later in 2020, nearly 50,000 cars were recalled in China because of defective suspension. In the same year, 9,500 Model X and Model Y were recalled in the US over bolt and roof issues.
Early this year, over 36,000 Model S and Model X vehicles were recalled in China in addition to over 134,000 in the US due to touch-screen failures. This was requested by the National Highway Traffic Safety Administration (NHTSA).
Following the latest company news, Tesla (TSLA) stock closed Wednesday trading at $605.12, down approximately 3%. The dip continued during Thursday’s premarket, whereby TSLA stock is trading at around $592 (-2%).