What happened
Oh, dear! It seems that Tesla (NASDAQ: TSLA) is in trouble with the National Highway Traffic Safety Administration (NHTSA) again.
Earlier this week, Tesla stock got dinged when the NHTSA demanded the company recall and fix a problem with 53,822 Tesla Model S, 3, X, and Y electric vehicles, whose Full Self Driving software was encouraging them to roll through stop signs without stopping. Two days later, it seems NHTSA is mad at Tesla again, and this time the size of the recall is much bigger.
So why is Tesla stock up 2.7% as of 11:40 a.m. ET?
Image source: Getty Images.
So what
As Electrek reports today, the NHTSA has become aware that "the audible seat belt reminder chime" in certain S, 3, X, and Y electric vehicles isn't always going off when the cars are started without the driver first buckling up. And because of this, Tesla is going to have to recall 817,143 more vehicles.
And yet ... once again, it turns out that this is a recall in name only. As NHTSA's advisory makes clear, this is a "software error" causing the problem. And so once again, it turns out that Tesla has a super-simple solution to the issue: "A firmware release will correct the software error, so that the audible seatbelt reminder chime will reset if it is interrupted while chiming."
Now what
In fact, many cars affected by this issue appear to have already been fixed through software updates that were sent out over the air on Jan. 27 and Jan. 28. And any cars that got missed in those earlier rounds will get fixed when another software update goes out in early February. So in fact, it seems likely that the majority of the cars affected have already been fixed -- even before this recall was announced.
Far from a problem for Tesla, these back-to-back "recalls" of the company's electric cars actually illustrate the advantages of a software-forward car company. While the size of Tesla's latest recall may seem staggering -- nearly a year's worth of production -- the actual costs Tesla will incur are minimal.
And the PR value for Tesla is just priceless.
10 stocks we like better than Tesla
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Tesla wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of January 10, 2022
Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns and recommends Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
