Market News

Tesla Asked To Recall 158,000 Vehicles Due To Safety Concern; Shares Drop

The US National Highway Traffic Safety Administration (NHTSA) urged Tesla to recall around 158,000 vehicles over safety concerns. Shares declined 1.3% in Wednesday’s after-market trading.

Tesla’s (TSLA) vehicles that have been asked to recall involve 2012-2018 Model S and 2016-2018 Model X. The US car-safety regulator stated that its Office of Defects Investigation unit has detected a media control unit failure leading to the vehicles’ rearview camera and touchscreen displays not working.

The NHTSA has asked the electric vehicle maker to respond to the recall request by Jan. 27. Failure to do so will attract civil penalties. (See TSLA stock analysis on TipRanks)

On Jan. 13, Edward Jones analyst Jeff Windau initiated coverage on Tesla with a Hold rating. Although Windau views TSLA as a market leader in the electric vehicle space, he also sees the company facing incremental competition.

The rest of the Street is sidelined on the stock. The Hold analyst consensus shows 14 Holds, 7 Buys, and 6 Sells. The average price target of $534.63 implies downside potential of 37.4%. Shares have rallied by about 714% over the past year.

Meanwhile, TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Tesla is currently Very Positive as 15 hedge funds increased their cumulative holdings in TSLA by 228.8K shares in the last quarter.

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