Tesla (TSLA) - Get Tesla Inc Report shares fell on Tuesday, dropping nearly 5% in premarket trading, after the electric vehicle giant said it is recalling nearly 12,000 vehicles due to a software communications error issue that can trigger false forward collision warnings.
Tweets from Tesla founder and CEO Elon Musk indicating its recently announced agreement with rental car giant Hertz Global (HTZ) - Get Hertz Global Holdings Inc Report isn't a done deal also added pressure to the stock.
Tesla is recalling nearly 12,000 U.S. vehicles sold since 2017 because a communication error may cause a false forward-collision warning or unexpected activation of the automatic emergency braking system, the National Highway Traffic Safety Administration said Tuesday.
Tesla said the recall of 11,704 Model S, X, 3 and Y vehicles was prompted after a software update on Oct. 23 to vehicles in its limited early access Full-Self Driving (Beta) population.
The software issue is the second recall by Tesla in as many days. The electric carmaker on Monday issued a recall related to 3,000 Model 3 and Model Y sedans, where the front suspension lateral link fasteners can potentially loosen, causing the steering wheel to loosen and impacting driving safety.
A total of 2,791 vehicles are potentially involved, although only 2% are estimated to have the defect in question, according to the recall report. Tesla will tighten or replace the lateral link fasteners as necessary for free.
Adding pressure to Tesla stock on Tuesday were a series of tweets from Musk that cast doubt on the clean-energy carmaker's $4.4 billion deal with Hertz Global.
In a series of replies from his verified Twitter feed to a message noting Tesla's recent market gains -- which pushed the stock to a fresh all-time high on Monday -- Musk said that "no contract" has been signed with Hertz, and that the company would "only sell cars to Hertz for the same margin as to consumers.'
He added that the deal, which reportedly would see Hertz buying 100,000 Tesla cars, mostly Model 3s, "has zero effect on our economics."
At last check, shares of Tesla were down 4.56% at $1153.50. The stock ended the trading day Monday at an all-time high of $1208.59. The shares are up 66% year to date.