158,000 cars may be forced to recall. This is bad news. But how bad it is debatable.
On Wednesday, the National Highway Traffic Safety Administration, or NHTSA, sent a letter to Tesla (ticker: TSLA) essentially recalling electric-vehicle manufacturer cars built between 2012 and 2018 for problems with the center touch screen. Was requested This can occur as a result of the loss of rearview camera image, citing an example.
Tesla did not immediately return a request for comment about its recall plan. NHTSA did not immediately return a request for comment regarding the letter it sent to the agency to send the letter.
Memories do not always ding car stock. The effect depends on what the problem is, the cost of fixing it and of course, if someone was hurt. It can be difficult to put all those answers in context. Investors should, at a minimum, be aware of the recall to avoid any lingering surprises down the road.
Tesla stock has started down about 1% during the day
By comparison, an increase of about 0.2%. A 1.2% spread between Tesla stock and the rest of the market results in a stock market value of about $ 10 billion, or about $ 61,000 as a car. If this problem is not likely to get worse, it is too much to miss.
Investors seem to have done the math and are less concerned than before. Tesla stock is now up 0.9% in Thursday trading, while the S&P 500 is up 0.3%.
The initial decline reflects uncertainty – which investors hate. The number of cars cited in the NHTSA letter is large and Tesla does not have a traditional dealer network. Parts replacement can be complicated if it arrives. But Tesla has handled numerous recalls in the past at its company-owned service centers.
Is remembered For example, the Tesla 2015 Model S sedan has been issued with four recall. The car also has a five-star safety rating from NTHSA. Some 2015
) The X3 SUV models, by comparison, have been recalled three times. That vehicle also has a five-star safety rating.
Investors are likely to care more about Tesla’s fourth-quarter earnings report, which should be at the end of January. Analysts are looking for $ 1 in earnings per share. More important than earnings will be 2021 delivery guidance. According to analyst consensus estimates over the past few weeks, deliveries from less than 800,000 vehicles this year are estimated to be around 836,000. The highest street estimates for 2021 deliveries are in the range of 860,000.
Delivery and profits will drive Tesla shares after earnings. Tesla stock has already made a strong start to the new year after rising more than 740% in 2021, nearly 22% year over year.
Write Al Root at [email protected]