Tesla Inc. is recalling all Model S cars built before April 2016 to retrofit a power-steering component as the company caps its worst one-month performance in the stock market since December 2010.
The issue, which the carmaker said has not led to any accidents or injuries, impacts only the flagship Model S sedan, not the Model X sport utility vehicle or more affordable Model 3. The recall affects roughly 123,000 vehicles globally. Loup Ventures Managing Partner Gene Munster estimated the fix could cost Tesla more than $60 million.
“The bigger issue is erosion of brand which impacts demand for Tesla’s and investors’ willingness to keep funding the Tesla mission,” Munster wrote in a note to clients. “Our patience is being tested, but we continue to expect Tesla to be a winner” in electric and autonomous vehicles.
The carmaker said it’s performing the voluntary recall after observing “excessive corrosion in the power steering bolts, though only in very cold climates, particularly those that frequently use calcium or magnesium road salts,” according to an email sent to impacted customers.
“Nonetheless, Tesla plans to replace all early Model S power steering bolts in all climates worldwide to account for the possibility that the vehicle may later be used in a highly corrosive environment,” the electric-car maker said in the email.