Tesla Shares Drop 3% Amid News of 6,000-Unit Recall and Market Share Decline

Recall of 5,974 Units Due to Bolt Part Defect
Monthly Market Share Drops from 29% to 11%

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] Tesla, the American electric vehicle company led by CEO Elon Musk, has decided to recall nearly 6,000 vehicles due to faulty bolt tightening. Additionally, Tesla's stock price dropped about 3% amid consecutive setbacks, including a report indicating a decline in Tesla's market share.

On the 2nd (local time), major foreign media reported that Tesla will recall 5,974 electric vehicles due to concerns that the brake caliper bolts, which are hydraulic devices that hold the brakes, have loosened, potentially causing tire air pressure to drop and increasing the risk of collisions.

According to the U.S. National Highway Traffic Safety Administration (NHTSA), the recall targets specific vehicles among the 2019?2021 Model 3 and 2020?2021 Model Y models that may have faulty bolts.

Tesla plans to offer services to customers owning the recalled vehicles to inspect, tighten, or replace the caliper bolts.

Previously, last year, Tesla recalled 50,000 vehicles in China due to suspension defects, which absorb road shocks, and 9,500 vehicles in the U.S. due to faulty roof parts and bolts.

Also, in February, Tesla recalled 135,000 Model S and Model X vehicles in the U.S. due to touchscreen malfunctions.

Following the recall decision, news also emerged that Tesla's global market share has shrunk.

[Image source=Reuters Yonhap News]

Dan Levy, an analyst at global investment bank Credit Suisse, released a report on the same day stating that Tesla's global electric vehicle market share dropped from 29% in March to 11% in April.

Levy noted that Tesla's monthly market share was the lowest since January 2019, with simultaneous declines in China, Europe, and the U.S. He also diagnosed that intensified competition in the electric vehicle market and rising Tesla vehicle prices have contributed to the weakening of Tesla's market dominance.

Amid these consecutive negative news, Tesla's stock price closed at $605.12, down 3.01% from the previous day on the New York Stock Exchange.

Bloomberg News reported that this drop in Tesla's stock price is the largest since the 3.09% decline on the 13th of last month.

Bloomberg stated that investors are closely watching intensified competition in the electric vehicle market, the shortage of automotive semiconductor chips, a series of Tesla vehicle accidents, signs of slowing sales in the Chinese market, and delays in the completion of Tesla's factory in Germany, adding that "pressure on Tesla's stock price is increasing."

Wedbush Securities analyst Daniel Ives commented on Tesla's stock price decline, saying, "Bad news that the market would have ignored last year is now being accepted (by the market)."