By on March 30, 2018

tesla model 3

Tesla’s once sky-high share price has taken a serious hit in recent days, so news of the electric automaker’s recall of 123,000 Model S vehicles couldn’t have come at a worse time.

Describing the recall as voluntary, Tesla sent emails to owners of all Model S electric cars built before April 2016 to warn of an issue affecting the car’s power steering system. The issue involves corrosion impacting the bolts holding the power steering motor to the rack, which can then shear off — leading to a loss of power steering. 

The automaker claims it noticed the issue in vehicles operating in cold climates, with calcium and magnesium road salts playing a role.

“Tesla plans to replace all early Model S power steering bolts in all climates worldwide to account for the possibility that the vehicle may later be used in a highly corrosive environment,” the automaker said in its email.

“If the bolts fail, the driver is still able to steer the car, but increased force is required due to loss or reduction of power assist.”

In this case, Bosch supplied Tesla with the affected parts. The issue seems identical to a problem reported last October by a Tesla Motors Club forum poster from Massachusetts, who reported his car’s steering woes to the automaker. The poster wasn’t too pleased when Tesla got back to him, quoting him a price for a new steering rack ($1,920).

After taking the vehicle into a Tesla service center, the poster said, “[The technician] said he’s seen this quite often. Sometimes the assist motor is just hanging there.”

As we said, the recall comes at a bad time for Tesla. The company is pulling out all the stops to reach its already pushed-back Model 3 production goal, even going as far as calling up workers from the Model S and X assembly lines to voluntarily work on the smaller sedan. Bloomberg reports CEO Elon Musk attempted to fire up his factory’s workforce with an appeal to prove the “haters” wrong. (The Reddit-like language is very apropos.)

Musk told workers that hitting a Model 3 output of 300 vehicles per week at its Fremont, California plant would represent an “incredible victory.”

After Musk’s promise of reaching 5,000 Model 3s per week by the end of 2017 came and went, the CEO pushed the goalposts further back. The company’s goal is now a production rate of 2,500 Model 3s per week by the end of the first quarter of 2018. So, right now. The 5,000 target still stands for the end of June.

In the last two-and-a-half weeks, Tesla has seen its stock slide 23 percent. At the close of trading Thursday, Tesla shares stood at $266.13 — a major comedown from a peak of $383.45 in June of 2017.

[Source: CNBC] [Image: Tesla]

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36 Comments on “Amid Stock Slide, Tesla Issues Largest Recall to Date...”


  • avatar
    FAHRVERGNUGEN

    The emperor’s new clothes are becoming transparent.

  • avatar
    65corvair

    Good timing for Tesla, as the stock market is closed today. Just a coincidence?

    I understand all new technology failing, as it hasn’t been out in the real world, but a power steering unit is hardly new nor are bolts and road salt.

    Be sure to go to the link in the article, has a good photo.

    • 0 avatar
      stuki

      It’s less about individual parts in and of themselves being new, than about the batteries and driveline forcing a different packaging, as well as a different environment, for everything, compared to in a traditional ICE car.

      A lot of stuff can be modeled and “tested” virtually these days. But not every little detail. The correct placement and dimensioning of which, wrt airflow, temprature, vibration etc., etc, has slowly been learned on traditional cars over millions of units. Some of those learnings do carry over, but not every single one. So there are bound to be little hickups and annoyances now and then, until electric cars have been around and proven themselves over lots of miles and units.

    • 0 avatar
      indi500fan

      Very interesting 13 page thread there thanks. If you scroll thru it, you will see some of the bolts that have been removed.

      In my experience, it’s unusual to have a bolt of that length in a manufactured component like this which is threaded all the way to the head (65 mm bolt length, 65 mm of threads), typically you would have a section of unthreaded shank between the end of the threads and the head.

      Almost looks like Bosch was sending somebody down to the local hardware store for supplies.

  • avatar
    87 Morgan

    Me thinks they are in trouble.

  • avatar
    Vulpine

    While the author mentions that it’s a Bosch-supplied part, they forget to mention that Bosch is supplying the replacement parts for free; the cost to Tesla is minimal outside of some people’s knee-jerk reaction in trying to blame Tesla for the problem.

  • avatar
    chuckrs

    “In this case, Bosch supplied Tesla with the affected parts.”

    I guess it was a mistake to rely on a major automotive supplier. Are other makes potentially affected?

  • avatar
    EBFlex

    This is fantastic news.

    Between con man Elon missing every deadline, no profits, poor quality parts, shoddy builds, we now have a recall!!

    No wonder why Elon is asking for volunteers to build his garbage cars.

  • avatar
    stingray65

    At current burn rates, Tesla will be out of cash by the middle of summer, and recent downgrade to junk bond status means that Tesla can’t go to the bond markets for a cash infusion. This means the only way to get operating cash is the equity markets, but issuing new shares will dilute the value of current shares, driving down Tesla share prices further, and leading to more “sell” orders. This recall is nothing in comparison to the potential problems with the recent Model X fatal barrier crash in CA, where the driver apparently had been concerned about autopilot on his vehicle, which at the very least will generate lots of unwelcome headlines, and at worst huge liabilities and fines they can’t afford. Throw in slowing sales of the S and X, the continuing inability to ramp up Model 3 production, and Tesla is in HUGE trouble.

    TTAC Interviewer: “How did you go bankrupt?”
    Elon: “Two ways, gradually and then suddenly”

    adapted from Ernest Hemingway, from The Sun also Rises.

    • 0 avatar
      Vulpine

      There’s an upside to the stock price going down, you know. If one chooses to believe that Tesla CAN succeed at their goals (which seems almost imminent now) then while the shares may be diluted for existing investors, those shares now come onto the market at discount prices, meaning more people can buy in without having to pay full price for those shares. If they fall low enough, I may even be tempted to buy in myself. (I bought in to Apple when the share price was a (post-split) $2/share and now see a 1500% increase in value over the original purchase PLUS receiving my original investment every year as a dividend.) Why couldn’t the same work for Tesla?

      • 0 avatar
        stingray65

        How is Apple different than Tesla?

        Apple makes a very nice profit, and Tesla has never done so.

        Apple products are widely popular even though they are not subsidized, while Tesla makes a niche product that is heavily subsidized.

        Apple makes a product that benefits from low energy prices as we have today, while Tesla makes a product that benefits only when oil prices are sky high.

        Apple doesn’t have to deal with the UAW, Tesla soon will (unless they go into bankruptcy first).

        • 0 avatar
          Vulpine

          “How is Apple different than Tesla?”
          —- Where was Apple between 1992 and 1995?
          Apple didn’t always make a very nice profit; they were mere days away from bankruptcy when they got that relatively small loan from Microsoft. Think closely about Apple between ’83 and ’95 and you’ll see that it really wasn’t all THAT different from Tesla today.

          • 0 avatar
            stingray65

            Yes Apple has had some close calls with bankruptcy, but they never went 15 years without making a profit. And when Apple was flirting with bankruptcy their stock price was in the toilet, but until recently, the more money Tesla lost the higher the stock price. Finally, Tesla needs a lot more than a relatively small loan to keep the doors open.

          • 0 avatar
            Vulpine

            I’m going to disagree with that, Stingray.

            While I’m offering a very big “IF” in this case, IF Tesla were to receive enough cash to at least make partial payment on some outstanding loans–enough to keep the company afloat ’til the end of this year, let’s say–then the Model 3’s production issues will have time to be resolved AND full-speed production will probably already be in progress, realizing more income from that production.

            This may not fully resolve their issues but it would turn their cash flow around to where they can resume growth and slow down some of their capital spending.

          • 0 avatar
            stingray65

            The problem with your scenario Vulpine is that suppliers are going to get very nervous (if they aren’t already) about getting paid, and if they start demanding cash up front, Tesla will need even more cash and/or will need to move to 3rd tier suppliers with a bigger risk appetite or ignorance of Tesla’s situation. Is suppliers get more demanding, it will make it very difficult to ramp up production and may reduce quality that is already pretty bad (3rd rate suppliers are 3rd rate for a reason). In other words, Tesla is now in a place where their cash needs are getting bigger, and the “banks” are now putting “closed” signs out whenever Elon is outside. Perhaps Elon will soon regret burning his bridges with Trump, because I don’t see a Federal bailout.

          • 0 avatar
            Vulpine

            @Stingray: I think you need to read what I wrote earlier today then, since I’ve already covered those points.

        • 0 avatar
          John Horner

          Apple manufactures products for tens of dollars in China and then sells them for hundreds of dollars.

          • 0 avatar
            Vulpine

            “Apple manufactures products for tens of dollars in China and then sells them for hundreds of dollars.”

            If that were true, then the iPhone X should be realizing $900 in profit, not a mere $400.

  • avatar
    Sub-600

    Elon fanbois shouldn’t panic yet, not unless he says he’s building a facility in Jonestown.

  • avatar
    turbo_awd

    Glad I got my Model 3 refund 2 weeks ago, before any cash crunch hit.. If they go Chapter 11, a lot of reservation holders may suddenly find themselves last in the line of creditors..

  • avatar
    Carlson Fan

    Considering how poorly the operations side of Tesla runs, I am surprised it has taken this long. They have no clue how to competetively manufacture in the automotive market.

    • 0 avatar
      mcs

      “They have no clue how to competetively manufacture in the automotive market.”

      http://money.cnn.com/2018/03/14/news/companies/ford-steering-wheel-recall/index.html

      https://www.thetruthaboutcars.com/2018/03/toyota-discovers-bigger-pistons-arent-better-issues-camry-recall/#comment-9501304

      https://www.thestar.com/business/2016/04/29/why-fiat-chrysler-may-have-reached-the-end-of-the-road-olive.html

      • 0 avatar
        Carlson Fan

        So because companies like Ford and Toyota and have recalls they suck at manufacturing too?

        Your as clueless as Tesla………….lol

      • 0 avatar
        JohnTaurus

        In which of those stories did Ford, Toyota or FCA make lofty production goals, take a bunch of deposits, and utterly fail at meeting said goals?

        Nobody is saying having a recall is unusual, but given the volumes Ford, Toyota and FCA achieve vs. Tesla, I’d say the “legacy” automakers are doing just fine.

    • 0 avatar
      SCE to AUX

      In this case, you mean Bosch.

  • avatar
    Big Al from Oz

    Anode and cathode. Ions. Been around since the Big Bang.

  • avatar
    krhodes1

    I’m making popcorn – anyone want to join me to watch the show?

  • avatar
    V16

    PROFITS not PROMISES are the only thing that matter in any cash intensive manufacturing operation.

  • avatar
    derekson

    Turns out AutoPilot was engaged on the car that crashed into the dividing barrier: https://www.tesla.com/blog/update-last-week’s-accident

    Surely this will help Tesla’s stock price and funding problems.

    • 0 avatar
      mcs

      We had a similar accident in New England around the same time the California accident happened. Though, autopilot wasn’t engaged – since actually wasn’t a Tesla. Yes, these incidents happen with non-teslas and without autpilot.

      https://www.necn.com/news/new-england/Serious-Crash-at-NH-Toll-Booth-Closes-Highway-478201163.html

      • 0 avatar
        John Horner

        Yes, human drivers make mistakes and crash into things. Self-driving vehicles are being advertised as a safety device which will not make the dumb mistakes human drivers make so often.

        Tesla has no business putting half done autopilot systems on the roads for beta testing.

    • 0 avatar
      Vulpine

      “In the moments before the collision, which occurred at 9:27 a.m. on Friday, March 23rd, Autopilot was engaged with the adaptive cruise control follow-distance set to minimum. The driver had received several visual and one audible hands-on warning earlier in the drive and the driver’s hands were not detected on the wheel for six seconds prior to the collision. The driver had about five seconds and 150 meters of unobstructed view of the concrete divider with the crushed crash attenuator, but the vehicle logs show that no action was taken.”

      While I will acknowledge that the AP was engaged, based on this data, I have one question: Why did the driver ignore multiple warnings AND a clear view of what was about to happen? Is this another one of those cases where the driver decided to take a nap while trusting the system too much? If, as we have been told, that the supposed owner of this vehicle was aware that said vehicle would swerve at this specific location, why was he not alert and ready to take over… again?

      Or maybe this was ‘suicide by Tesla,’ much as we hear of ‘suicide by cop’, such as occurred right here in my home town not all that long ago? Or maybe he intended to let the car crash and survive–hoping to sue Tesla for whatever he could get. I don’t know. I doubt anybody knows. All I want to know now is that if this was the same car as supposedly making that habitual swerve… why was there no reaction this time?

  • avatar
    John Horner

    Manufacturing and selling cars in volume is a serious, exacting business which requires excruciating attention to detail by many thousands of people. Tesla has not demonstrated its capacity to behave accordingly.

    Tesla routinely releases unfinished, incompletely tested products to the market to be sorted out later … just like software and internet companies have gotten away with for decades. What Musk & Co. don’t understand is how much higher the stakes are for vehicles than they are for a website.

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