The National Highway Traffic Safety Administration (NHTSA) received a letter from Tesla (NASDAQ: TSLA) on September 21 that informed them that the electric vehicle (EV) manufacturer would perform an over-the-air update for one of their system.
The recall for a faulty window reversal system that did not react accordingly when detecting an obstruction seems to be the reason for a 1.1 million vehicle recall. The recall will cover some 2017-2022 Model 3, 2020-2021 Model Y, and 2021-2022 Model S and Model X vehicles, according to a Reuters report published on September 22.
Furthermore, Tesla claimed that it was unaware of any warranty claims, crashes, or injuries due to this faulty system.
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Market participants that are more bearish on Tesla could use this to justify shorting the stock, as recently Micheal Burry claimed that he is no longer short TSLA, but he should have been.
TSLA chart and analysis
In the last month, TSLA has been trading in the $265.74 to $313.80 range, staying above all moving averages. In addition, technical analysis indicates a support zone from $282.90 to $285.49 and a resistance zone from $301.38 to $309.32.
TipRanks analysts rate the shares a ‘moderate buy,’ with the average price in the next 12 months reaching $311.97, 3.71% higher than the current trading price of $300.80.
In essence, Tesla’s vehicles failed to comply with the federal motor vehicle safety standards on power windows, possibly utilizing excessive force by pinching a driver or passenger before retracting the window.
Allegedly, vehicles in the production and pre-delivery phase have received the necessary software upgrades, complying with the requirements.
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