Welcome back to Cheddar is closing bell.
Everyone let's talk ST Tesla that stack under pressure today as well.
The company issuing numerous recalls over the past decade,
but really the total number increasing just in the past few weeks.
The electric automaker just this week issuing recalls related
to pedestrian warnings and defective windshield defroster software.
And then last week issuing recalls related to seatbelt reminder
times and an issue with the company's self driving software.
Well, numerous recalls. Are they just a growing pain for this company?
It's been public for more than a decade now or
is something else going on joining me now is Alright,
senior writer at Baron's Al.
Always good to see you. Thanks for coming on. What does this mean for Tesla?
The fact that we've seen several of these recalls just in the past few weeks.
Well, I mean to to use the language that used a little earlier.
It does mean something else is going on. It just might not be what you expect.
So, um, you know, to play Devil's Advocate,
none of these recalls a result in a car going into the shop,
right, They're all fixed with over the air software updates.
Uh,
you could read my reader feedback when I write
a story about a recall pointing out that,
you know,
Apple doesn't call it a recall every time they
fix the software bug on your iphone Now,
cars and phones are completely different but it is sort of a new
era where a lot of the features and cars are software enabled,
you know, Tesla is the leader,
you know,
but ford ford now boasts that it has a million cars on
the road with modems that are capable of over the air updates.
So, it is something new.
Now, the question is, uh, is recalling 800,000 cars for, you know,
a faulty seatbelt chime,
Does that mean that there's low quality,
Does that mean they're shipping buggy software?
That's something we're going to have to sort of figure out and follow over time?
I wouldn't say right now
that based on sort of these software enabled features
that you can say something broadly speaking
about Tesla quality versus somebody else.
Okay, so let me ask you this though, for Tesla owners. Al, what does it mean for them?
Do we know how long these software updates take? Is it a guarantee that they're safe?
So, it's a good question. Right?
If you look at, so again,
I don't want to always be playing Devil's Advocate for Tesla.
But if you look at their, you know,
crash star ratings and their safety ratings and the
safety reports that Tesla puts out on themselves,
you know, they have five start safety ratings.
Uh, you know, the,
the accidents per mile driven look very low with Tesla versus the overall average.
Um, you know, it's a difficult, you know, it's,
it's data that's available and auditable, but it's, it's difficult to compare.
So certainly Tesla would argue their cars are safe and none of these, you know,
these over the air updates.
They're probably done.
Right.
So Tesla recalled the car, you know,
in concert with Nitsa has said they'll do an
over the air update for all intensive purposes.
You know, most of those are probably done.
You know, these, uh, you know, updates and recalls.
What happens is somebody files a complaint
and then it's a looks at it and then they get with the automaker and they say, okay,
you should recall these.
Um, but you know, not everybody experienced the same problems.
So there's probably many owners like when you take your car into a shop, you know,
they always check for recalls
and like, oh look, you know, your lug nuts might break.
So I'm going to fix your lug nuts for you while you get your oil changed.
That's, that's actually not a typical for car owners.
So, you know,
the vast majority of Tesla owners wouldn't have experienced anything like this.
Um, so I don't think you can say the cars are unsafe.
I think what we need is sort of a way to, to evaluate, you know,
software enabled features.
Um, like this going forward.
So it is interesting because it says, you call it right,
the National Highway Traffic Safety Association Administration,
whatever the A is, I know you're gonna help me out on that one out.
But it does seem as if
scrutiny from that agency is ramping up against Tesla,
we've been covering this for years now.
I mean, does that have any long term potential impact on the viability of these cars?
Yeah. Um, so it's two issues there. Right.
So definitely, I don't think that there is an issue for, you know,
the viability of the cars and the safety of cars.
Um, all automakers,
including ford General Motors
Chrysler, which is now called Atlantis,
are, you know, pushing into software, pushing into software enabled features,
pushing into self driving.
So there's sort of two issues these over
the air updates and recalls certainly are issues.
We need to follow them again,
we need sort of context to determine whether it's actually a risk for the stock.
I would go so far as saying, these sorts of recalls are not risks for the stock.
Most recalls don't impact automotive stocks, even though the Chevy bolt recall,
which ended up costing billions of dollars,
wasn't really a big deal for the stock because actually for General Motors stock,
because the supplier ended up paying for the recall.
Now with now we have the self driving car features and that's something that's,
is overseeing
and that's something that, again,
all automakers are pushing into Tesla tends to be the most aggressive.
So you could say that they have the
most risk associated with that from being aggressive.
Um, but, you know, it's not like, you know, cars would come off the road,
it's not like, um,
Nitsa would, you know, have some consent decree.
You know, they might have to shut off features, they might have to relabel features.
They might take a hit to brand equity if they run into trouble with Nitsa.
But this is sort of the future of cars.
Software enabled cars are going to be more like your phones.
That's just kinda how it's gonna go for. Everyone seems a bit easier, right?
But having to take the car all the way back, wait for the update, get it back.
A software update certainly would be a help when it comes to convenience
and now we've got to leave it there. Thank you as always for joining that.
Alright, senior writer at Barons.