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Recall of Tesla cars in China
28 Jun 2021 (513 views)  

There was big news for Tesla over the weekend. The regulator in China required Tesla to recall 285,000 cars sold in China over a software issue that could potentially cause accidents. This affects all Tesla cars sold in China.

https://www.wsj.com/articles/tesla-recalls-285-000-vehicles-in-china-most-of-them-locally-made-11624698587  

When a manufacturer has to recall the cars to fix a manufacturing fault, it could cause a huge loss to the manufacturer. 

I hold 500 shares of Tesla with a market value of US$335,000. If the stock price drop by 10%, it would cause a loss of $33,500 to me. 

However, the stock market shrug off this news. Tesla stock price moved higher when the market opened after the weekend.

As this is a software issue, it was possible for Tesla to update the software online to all the Tesla cars. 

On the positive side, the update could enhance the confidence of the existing and new customers on the Tesla cars. It also demonstrates the superior advantage of the Tesla software platform, i.e. that the software can be improved easily with an online update.

I shall be monitoring the stock price closely for a few days, in case the problem was not resolved.

Tan Kin Lian

 


Recall of Tesla cars in China
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There was big news for Tesla over the weekend. The regulator in China required Tesla to recall 285,000 cars sold in China over a software issue that could potentially cause accidents. This affects all Tesla cars sold in China.

https://www.wsj.com/articles/tesla-recalls-285-000-vehicles-in-china-most-of-them-locally-made-11624698587  

When a manufacturer has to recall the cars to fix a manufacturing fault, it could cause a huge loss to the manufacturer. 

I hold 500 shares of Tesla with a market value of US$335,000. If the stock price drop by 10%, it would cause a loss of $33,500 to me. 

However, the stock market shrug off this news. Tesla stock price moved higher when the market opened after the weekend.

As this is a software issue, it was possible for Tesla to update the software online to all the Tesla cars. 

On the positive side, the update could enhance the confidence of the existing and new customers on the Tesla cars. It also demonstrates the superior advantage of the Tesla software platform, i.e. that the software can be improved easily with an online update.

I shall be monitoring the stock price closely for a few days, in case the problem was not resolved.

Tan Kin Lian