Tesla issues recall for 123000 Model S vehicles due to rusty bolts

2014 BMW i3 REx vs Chevrolet Volt comparison

After Tesla's Thursday declaration, in which it recalled a large number of the Model S sedans due to a "steering issue", shares of the company have fallen to its worst ever in its seven year history. Specifically, the issue affects vehicles made before April 2016, particularly those in colder climates where road salt can corrode power steering bolts.

The company's share price is down almost 30% over the last week, which is perhaps overdue given that its market cap had been higher than Ford's, despite Tesla still yet to turn a profit, is burning through its cash pile at an unprecedented rate and still has serious unresolved production issues relating to its Model 3. As reported by Minda Zetlin, there are concerns that Tesla may run out of cash within a year due to the company's failure to meet production targets for its new, lower-priced Model 3 auto.

In addition to the Model 3 issues, Tesla has been working with regulators to investigate a fatal crash involving a Model X last week that prompted the company to defend the record of its driver-assistance system Autopilot. The electric vehicle producer reported ($3.04) earnings per share for the quarter, beating the consensus estimate of ($3.12) by $0.08.

In order to ensure your safety, Tesla will proactively retrofit a power steering component in all Model S vehicles built before April 2016.

Tesla's Model S has now faced three recalls. Should one of the bolts fail, the driver would need to use "increased force" to steer the auto at lower speeds, just like driving a vehicle without power steering.

The troubles keep coming for Model 3 production.

Nomura reiterated their buy rating on shares of Tesla (NASDAQ:TSLA) in a research report report published on Thursday morning. The company says if the bolts fail it will make driving at low speeds and parallel parking more hard. However, they claim that it will not affect control at high speed. At this time there is no immediate action you need to take and you may continue to drive your Model S. Tesla will contact you to schedule an appointment when parts are available in your region. In a blog post about the collision Tesla wrote, "Safety is at the core of everything we do and every decision we make, so the loss of a life in an accident involving a Tesla vehicle is hard for all of us".

Tesla spent $3.4 billion in cash on "operating cash flow less capital expenditures" past year. According to a Tesla blog post about the accident, "We have never seen this level of damage to a Model X in any other crash".

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