Tesla is recalling some 2020-2022 Model S, Model X, Model Y, and 2017-2022 Model 3 vehicles.
Tesla Inc (NASDAQ: TSLA) stock closed Thursday, February 10, trading at $904.55, down 2.95 percent from the day’s opening price. The decline extended during today’s premarket with approximately 0.57 percent as of February 11, 4:46 a.m EST. The electric vehicle giant company is reportedly recalling 578,607 Tesla vehicles in the United States.
According to US regulators, pedestrians may not be able to hear a required warning sound of an approaching car due to loud music or other sounds played by its “Boombox” feature.
“While Boombox and the pedestrian alert sound are mutually exclusive sounds, sounds emitted using Boombox could be construed to obscure or prevent the PWS from complying,” the US regulator noted.
However, the general stock market has been on the decline following an increase in interest rates to a 40-year all-time high. At 7.5 percent, investors and institutional investors have been in a sell-off period seeking alternative investment.
Nonetheless, Tesla has issued 10 recalls in the United States over the last four months, most of which have been issues with the software. Consequently giving competitors in the EV industry a vantage point.
According to media outlet Reuters, Tesla is recalling some 2020-2022 Model S, Model X, Model Y, and 2017-2022 Model 3 vehicles. The Boombox function enables Tesla users to play sounds via an external speaker while the vehicle is in motion. However, the US National Highway Traffic Safety Administration (NHTSA) has made it clear that the Boombox function is obscuring warning sounds for pedestrians.
Reportedly, the company anticipates performing an over-the-air software update that will disable the Boombox functionality when the vehicle is in Drive, Neutral, and Reverse modes.
TSLA Stock and Tesla Electric Vehicles
Despite the recent recalls, Tesla stock has gained approximately 10.84 percent. However, the company’s stock market has declined approximately 14 percent, 12 percent, and 13 percent YTD, in the past three months, and one month respectively through Thursday, according to market data provided by MarketWatch.
On the brighter side, the company leads the global electric vehicle industry by far with a market cap of around $963.23 billion.
According to a survey conducted by MarketWatch, Tesla stock received an average recommendation of Overweight with an average target price of $976.15 from 43 ratings.
The electric vehicle industry has come with its challenges, among them low sound emissions at a slower speed. As a result, the United States Congress mandated EV makers to add sounds to cars to make them audible when moving at a speed of 30 km per hour. However, at high speeds, other factors make electric vehicles more favorable even than gasoline vehicles in safety standards.