Tesla (TSLA) - Get Report will recall 135,000 Model S luxury sedans and Model X sport-utility vehicles because of touch-screen failures, it said in a letter to the National Highway Traffic Safety Administration.
The letter came responded to NHTSA’s letter to Tesla last month asking for a recall because some touch screens can fail when a memory chip exceeds its storage capability.
That in turn can disrupt the turn signals, driver assistance and defrost mechanism.
The affected vehicles are Model S cars built from 2012 to 2018 and Model X vehicles built from 2016 to 2018. Tesla said it would replace the touch-screen hardware
NHTSA’s Office of Defects Investigation "has tentatively concluded that the failure of the media control unit constitutes a defect related to motor vehicle safety,” the agency said in its letter.
“Accordingly, ODI requests that Tesla initiate a recall to notify all owners, purchasers, and dealers of the subject vehicles of this safety defect and provide a remedy.”
Tesla shares recently traded at $845, up 0.6%. They have nearly tripled (up 193%) in the six months through Monday, as investors have gone nuts for electric-car stocks.
Morningstar analyst David Whiston is more circumspect, putting Tesla’s fair value at $306.
“Tesla has a chance to be the dominant electric vehicle firm long term and is a leading autonomous vehicle player as well as a vertically integrated sustainable energy company with energy generation and storage products, but we do not see it having mass-market volume this decade,” he wrote in a December commentary.