Tesla Recalls Model X Electric Vehicles Due to Controller Issue

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Tesla Inc. has announced a voluntary recall of nearly 55,500 Model X electric vehicles manufactured within the past two years. The recall is related to a potential controller malfunction that could result in the failure to detect low brake fluid and subsequently not display a warning light.

The National Highway Traffic Safety Administration has highlighted the importance of this issue, stating that driving the vehicle with low brake fluid can lead to reduced braking performance and increase the risk of a crash. Although Tesla has not recorded any incidents related to this condition as of October 10th, they are taking proactive measures to address the potential safety concern.

As a result of this recall, Tesla’s stock, represented by the symbol TSLA, has experienced a decline of 0.8% in premarket trading, reaching a nearly five-month low. This drop follows a three-day losing streak and disappointing earnings report for the company, making it the worst three-day performance of 2023.

Over-the-air Software Update

Tesla has stated that affected Model X vehicles were manufactured between 2021 and 2023. However, they have assured owners that no physical service visit is required. Instead, Tesla has released an over-the-air software update that can rectify the condition. Owners are advised to install OTA software release 2023.32.7 or a later version.

Capital Expenditure Targets

In addition to the recall announcement, Tesla has disclosed its capital expenditure plans in its latest quarterly filing. The company aims to allocate $7 billion to $9 billion in capital expenditures each year for the next two years.

Despite recent stock declines, Tesla’s shares have experienced a notable rally, with a year-to-date increase of 72.1%. Comparatively, the S&P 500 index has declined by 6.9% over the past three months and achieved a 10.0% gain this year.

Read: Tesla’s broken ‘triangle’ warns of more stock-selling pressure.
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