Tesla Inc. has announced that it would recall thousands of its Model X vehicles in China due to an increased risk for a crash. China's market regulator claimed that the potential issue of 'excessive corrosion' to the model's power steering bolts would be addressed by the recall.
Tesla Inc. would start the recall of its Model X vehicles due to a potential safety issue. The automaker recently told Roadshow through an email that it has noticed a feature of the vehicle that could cause excessive corrosion to the car's power steering bolts,
It was also explained that the Model X SUV models when driving along winter roads could cause the bolts to fracture and break. The result would be a loss of power steering that could lead to accidents.
The recall was only limited to Model X SUVs that were produced mid-October 16. According to a report by Reuters, the company would have to recall about 15,000 vehicles but claimed that the other Model X models are still safe to maneuver.
Owners of the recalled vehicles were requested to set an appointment with a Tesla Service Center for the company's mechanics to replace the affected bolts. The affected part would then be applied with a sealant that would prevent future corrosion.
If the car would be found to have defective bolts, the company would replace its steering gear with no extra costs.
In 2018, Tesla also recalled 123,000 Model S electric vehicles due to power steering bolt issues as well. The corrosion was also claimed to have caused by calcium and magnesium road salts, the same for the recalled Model X SUVs.
In other news, it was revealed that despite the announcement of the recall, Tesla's stock value rose up to five percent and is currently selling over 800 USD per unit.
According to Wedbush analyst Daniel Ives, Tesla has decided to raise its capital this morning. He had a neutral rating on the stock for about 710 USD for his 12-month price target. He claimed that the raising of the stock capital was a smart move for the company and that it would position it better for growth opportunities.
The capital raise was expected to be approximately at least two billion USD up to 2.3 billion USD before discounts and expenses when it offers its common stock. The raise was said to strengthen the company's balance sheet for its general and corporate purposes.
The company's CEO Elon Musk also announced that he would buy a 10 million-worth of stock in the public offering. Tesla's board member Larry Ellison also indicated that the company would purchase up to one million USD-worth of interest as well.
