Tesla Motors Inc (TSLA): Former NHTSA head says Musk is “partially right” about the term “recall”

Posted Jan 22, 2014

Earlier this month, Tesla Motors Inc (NASDAQ:TSLA) issued a software update to prevent chargers from overheating. The defect was found in under 3% of the 29,222+ adapters on the market. Tesla executives, including Elon Musk, insisted that this should not be considered a recall.

?While NHTSA may call this a recall, we call this modern technology,? said Tesla Motors VP of sales Jerome Guillen at the time. ?We can make every car better over time without having to bring the car in.? The recall was for a plug that risks overheating during the charging. The defect was found in under 3% of the 29,222 adapters.”

On January 14th, Tesla Motors CEO Elon Musk wrote a tweet that said “Some confusion in media reports today. No Tesla vehicles are being physically recalled by Tesla.”

“There was an over-the-air software update (done last month) and an upgraded US 14-50 adapter will be mailed to customers,” he added. “The word ‘recall’ needs to be recalled.”

The software update was issued after there was a garage fire reported when charging a Model S. Musk received criticism for insisting that this was not a recall.

David Strickland, the former NHTSA head, said that Tesla’s ability to do over-the-air update should be ?precedent-setting? for regulators that will now likely review the use of the word “recall” for these situations. Strickland said that Musk is “partially right” in his assertions.

?As much as Tesla disagrees and Elon disagrees with the characterization of a recall, I would have to say he?s partially right there.  What people think of in terms of a recall is you get a letter from the manufacturer to bring your car in to the dealership,? stated Strickland. ?Tesla is able to change vehicle dynamics and make vehicle changes from the sky.  You don?t have to impose an inconvenience on the consumer when that remedy comes in.? Strickland is no longer the head of the NHTSA, but his opinions are considered as very credible.

Related Link:
– Tesla Motors Inc (TSLA): 22,300 Model S? sold in 2013, 6,900 in Q4 2013 alone, software update being issued

[Source: Bloomberg]