Bloomberg and other outlets today reported that Tesla has issued a recall on roughly 30,000 Model S and Model X vehicles imported to China that were manufactured between 2013 and 2017. TSLA stock declined in early trading on the news, recovering throughout the day as the overall markets rose into market close.
Per Bloomberg, "The company is recalling vehicles made between Sept. 17, 2013, and Jan. 15, 2018, according to a statement by the State Administration for Market Regulation on Friday. There are two different suspension defects, and some of the recalled vehicles potentially have both of them, the authority said."
Initial details were relatively sparse, but Electrek was able to find a little more information in a letter from Tesla to the US National Highway Traffic Safety Administration (NHTSA) explaining the recall. The letter is reportedly from Elizabeth Mykytiuk, Tesla’s managing counsel for regulatory affairs.
“Due to the opinion of SAMR/DPAC that the topic required a recall in the China market, Tesla was left with the choice of either voluntarily recalling the subject vehicles or carrying a heavy burden through the Chinese administrative process. While Tesla disagrees with the opinion of SAMR/DPAC, the Company has decided not to dispute a recall for the China market only.”
Per Electrek, the suspension issues occur in less than 0.05% of Model S/X vehicles outside of China, and 0.10% in China. Tesla believes "the root cause of the issue is driver abuse, including that driver usage and expectation for damageability is uniquely severe in the China market," hence the higher rate of issues in the country and the isolated recall.
In other news out of China, Tesla is expected to begin exporting China-made Model 3s from Giga Shanghai this quarter. The move has led to questions on demand in China. For more analysis on the situation, please see the included video and be sure to follow Tesla Daily on The Street for the latest news and analysis.
Disclosure: Rob Maurer is long TSLA stock and derivatives.