Tesla Inc.’s (NASDAQ: TSLA) shares have raced higher over that past several years, giving the car company a market cap above that of many huge manufacturers, such as Ford, even though Tesla only produces tens of thousands of cars each quarter. Much of the increase is due to innovation, and most of the rest on the perfection of Tesla cars, both in terms of technology and the quality with which they are built. The quality reputation has started to fall apart.
Tesla decided to recall 11,000 of its Model X sports utility vehicles. According to Bloomberg:
Tesla Inc. is recalling about 11,000 Model X sport utility vehicles due to possible issues with their second-row fold-flat seats.
Only about 3 percent of the electric SUVs being recalled are expected to have issues, which the carmaker said it can correct in about 10 minutes with its mobile service operators. The problem, which was discovered in internal testing, involves incorrectly adjusted seat cables. Tesla has not received reports of any issues or accidents relating to the problem, it said.
Even if the problem is not significant, Tesla’s reputation has been damaged.
Two weeks ago, Tesla reported an unexpected slowdown in the production of its new Model 3:
Model 3 production was less than anticipated due to production bottlenecks. Although the vast majority of manufacturing subsystems at both our California car plant and our Nevada Gigafactory are able to operate at high rate, a handful have taken longer to activate than expected.
This triggered a rumor that some parts of the new car had to be built by hand. Tesla said that suggestion was “fundamentally wrong.” However, once again, Tesla’s ability to build the perfect car has been undermined by news that its production process is less than perfect.
Do these two pieces of news about Tesla vehicles reveal serious problems? Maybe not. But for a company with the reputation for never having any problems, they are a blow.
The #1 Thing to Do Before You Claim Social Security (Sponsor)
Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.
A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
