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Tesla Issues Recall But Company is Still Performing Well

Posted byBy Leo | Published on: CommentsComments (0)

Electric car maker Tesla Motors Inc. said on Tuesday deliveries of its Model S sedan in the fourth quarter blew past what the company had forecast, sending shares up nearly 16 percent.

Tesla delivered almost 6,900 Model S sedans in the quarter, 20 percent above what the company had forecast, Jerome Guillen, vice president of global sales and service, said at the Detroit auto show.

This year looks to be strong, he added.

“We look forward to 2014 with anticipation,” Guillen told a news conference at the show. “On the sales and service side, of which I’m responsible, it’s reckless growth.” He later said that he misspoke and meant to say “relentless growth.”

He said the company this year expects to double its global sales and service locations, which currently total almost 150 combined. He also said Tesla was working “feverishly” on the Model X crossover vehicle, which the company previously said would debut in the second half of 2014.

Analysts said California-based Tesla continues to perform strongly despite the specter of a safety probe by U.S. safety regulators related to two road fires of Model S sedans.

“Tesla seems capable of shrugging off news that would hamper most auto manufacturers. Today the electric car maker reported its best sales quarter ever,” Kelley Blue Book senior analyst Karl Brauer said. “As the brand begins global deliveries the potential for further growth remains high.”

Also on Tuesday, U.S. safety regulators classified as a recall Tesla’s move to provide upgraded wall adaptors and charging software, citing the risk of fire.

The National Highway Traffic Safety Administration said Tesla is recalling 29,222 Model S electric sedans from model year 2013 for the fix, according to documents filed online.

Last Friday, the electric car maker said it was providing customers with the new adaptor and software upgrade to prevent overheating of its charging systems.

Tesla never used the words “recall” or “fire” in Friday’s announcement.

Last week’s announcement by Tesla came after a November garage fire involving a Model S in Irvine, Calif., which the Orange County Fire Authority said may have been caused by a Tesla charging system or by a connection at the electricity panel on the wall of the garage.

Despite the recall, Tesla shares ended 15.7 percent higher at $161.27 on the Nasdaq on Tuesday.

source: reuters.com

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