Tesla Recalls More than Half a Million U.S. Vehicles

Tesla Recalls More than Half a Million U.S. Vehicles 

In Mid-February of 2022, Tesla announced that it recalled more than 500,000 automobiles in the U.S. because of an issue with its Boombox, a feature which allows the driver to play unusual sounds. The custom features of the Boombox allow several customized external noises that will enable the driver to play sounds outside the car while the automobile is moving. The new feature of Tesla got the attention of the National Highway Safety Administration. The agency said that this feature could be dangerous as it could generate noises that would hamper the ability of a pedestrian to hear warning signs like a car honking, thus risking an accident. Since electric vehicles are quieter than standard combustion engines cars, the Highway Traffic and Safety Administration (NHTSA) has required all-electric vehicles to have pedestrian warnings. 

Tesla, one of the top electric cars of 2022, will need to recall nearly 600,000 cars to tweak the Boombox feature, which went into effect in late 2020. The announcement by the company did little to impact Tesla shares. The stock price has declined in tandem with most U.S. technology shares in 2022, dropping nearly 13% by mid-February 2022. This recall for Tesla is the 11th that has been issued in the last three months. Following the recall by the NHTSA, Tesla informed the agency that they would update the Boombox to prevent it from making any sounds while the car was moving or in neutral. Elon Musk, the CEO of Tesla, announced in a tweet that the company needed to remove the Boombox feature because the "Fun Police made us do it." 

The recall on the Tesla Boombox was not even the first recall of February. Tesla needed to address an issue that reminded passengers to fasten their seatbelts. According to sources, more than 800,000 cars were recalled to address this issue. Before this, a recall was issued to handle the Full Self Driving feature, which had software bugs that made some cars roll through stop signs. 

Musk and the NHTSA

Elon Musk has had a contentious relationship with the agency. Most of the scrutiny started when federal regulators appointed a senior advisor to monitor issues related to Tesla vehicles. Currently, the NHTSA is evaluating Tesla's semi-autonomous driving technology, which has been responsible for 12 crashes in which the cars have failed to detect other automobiles on the road. Elon Musk hasn’t always taken such news lightly, as there are reports that, in 2018, he hung up on the chairman of the agency during a call about a probe on a crash that had the autopilot system engaged. 

Tesla Is Facing Competition

The adoption of electric vehicles brings a lot of competition to the table. Ford and GM have made great strides in producing electric cars. Ford even shut down its reservation system for the all-electric F-150 Lightning pickup truck to manage an overwhelming response. Chinese electric car startup Xpeng is going head-to-head with Tesla. Xpeng has been successfully competing with Tesla in China, and is now moving to Europe. The company recently unveiled its newest model, the G9 SUV. The company is already selling its P7 sedan all-electric vehicle in Norway. 

According to the Chinese Passenger Car Association, BYD is another Chinese electric car leader with Tesla, but rivals like Nio are gaining traction. The BYD models of electric vehicles ranked in the top 10 energy efficient cars that are sold in China.  

The Bottom Line

Tesla has had lots of success globally selling its all-electric vehicles. Despite experiencing several recalls on its cars, including the most recent that focuses on its Boom Box feature, Tesla has still outperformed its competitors. In January, the company reported a robust full-year profit which rose to $5.5 billion from $721 million in 2020. On the top line, 2021 sales rose 71% to $53.8 billion, from $31.5 billion in 2020. 

Despite a contentious relationship with the NHTSA, Tesla continues to gain popularity across the globe. The company is looking in the rearview mirror at several companies making strides in the electric vehicle business. In the United States, Ford and GM have developed light trucks that are very popular. In China, several companies compete head-to-head with Tesla and have moved to compete with the company outside their home turf. Moving forward, Tesla may be bound to receive requests for even more recalls, given that a senior advisor is looking at the company. Autopilot is bound to receive more scrutiny, but there’s no telling if the "fun police" will likely be the root of future recalls.