Tesla (TSLA) shares moved firmly lower Thursday after the National Highway Transportation Safety Administration said the carmaker will need to recall more than 360,000 of its cars due to risks associated with its self-driving software.
CEO Elon Musk said the word “recall” "for an over-the-air software update is anachronistic and just flat wrong!", a Tweet from his official Twitter account.
The NHTSA said the FSD system may allow Tesla cars to "act unsafe" around intersections and respond "insufficiently" to changes in posted speed limits. Tesla will need to recall around 362,758 cars made between 2016 and 2023, including certain Model S, Model X, Model 3 and Model Y vehicles.
"The feature could potentially infringe upon local traffic laws or customs while executing certain driving maneuvers," the NHTSA said in a statement. ""The system may respond insufficiently to changes in posted speed limits or not adequately account for the driver's adjustment of the vehicle's speed to exceed posted speed limits."
Tesla will issued a 'software' based 'over-the-air' recall, the company said.
CEO Elon Musk said the word “recall” "for an over-the-air software update is anachronistic and just flat wrong!", a Tweet from his official Twitter account.
"Our published data shows that improvement in safety ... safety statistics, it's very clear," Musk told investors on a conference call following the carmaker's fourth quarter earnings on January 23. "So we would not have released the FSD Beta if the safety statistics were not excellent."
"The trend is very strong toward use of FSD," he added. "I think something that still a lot of people out there don't quite appreciate is that Tesla -- of course, Tesla is as much as a software company as a hardware company, but Tesla is really one of the world's leading AI companies. This is kind of a big deal with AI on the software side and on the hardware side."
Tesla shares were marked 4.8% lower on the session immediately following news of the NHTSA recall, and changing hands at $204.35 each, after hitting a intra-day high of 217.65 earlier in the session.
