Tesla Recalls 135,000 Cars Over Screens U.S. Says Are Faulty

Tesla Inc. will recall about 135,000 Model S and X vehicles in the U.S. after a months-long investigation by the nation’s auto-safety regulator concluded their touch screens are defective.

Tesla equipped certain Model S sedans from 2012 to 2018 and Model X crossovers from 2016 to 2018 with Nvidia Corp. processors that are prone to wearing out, Tesla said in a recall report. The flaw can lead to the loss of rear-view camera display and other issues.

The National Highway Traffic Safety Administration sent a letter to Tesla last month saying it had determined the failures constituted a defect. While the company disagrees with the finding, it will voluntarily initiate a recall and replace memory devices within the processors.

Tesla shares closed Tuesday up nearly 4% to $873 in New York trading. The stock is up more than 23% this year.

NHTSA opened a preliminary investigation into the issue in June and upgraded the probe to an engineering analysis in November. The agency had asked Tesla to respond to its defect finding no later than Jan. 27, the day the electric-car maker reported quarterly earnings. Its recall report is dated Jan. 29.

In its response to NHTSA, dated Jan. 27 and posted by NHTSA on Tuesday, Tesla said it was issuing the recall “in the spirit of cooperation and to administratively conclude this investigation,” despite disagreeing with the agency’s preliminary findings that a software update would not sufficiently address the problem with the vehicles.

The company said it will conduct a voluntary recall and provide a free hardware solution in addition to software updates they have already implemented, the letter said.

“There have been zero accidents or injuries associated with any of the conditions described,” wrote Al Prescott, Tesla’s vice president of legal. While he said the company doesn’t dispute that some consequences of the the part wearing out may be related to safety, it “disputes that every safety risk is caused by a defect and that every defect creates an unreasonable risk to safety, especially when the condition does not surprise the driver while driving and the vehicle can continue to be safely operated.”

The agency defended its probe in a statement, pointing to the recall announced by Tesla as a sign of vindication despite the fact that the company’s recall falls approximately 23,000 cars short of the amount covered by NHTSA’s probe.

“As stated in our letter, the agency tentatively concluded that these vehicles contain a defect related to motor vehicle safety,” the agency said. “Safety is NHTSA’s top priority, and timely recalls are crucial to ensuring the safety of drivers, passengers, and other road users.”

NHTSA cannot require Tesla to recall a specific number of vehicles until its defect investigation is complete.

©2021 Bloomberg L.P.

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