TSLA price prediction as Tesla recalls millions of vehicles

 

Another obstacle for Tesla Inc. (NASDAQ: TSLA) is that it has started a recall of more than 2 million cars in the US. The revelation already caused TSLA stocks to experience a significant price decline on December 13.

Notably, the maker of electric vehicles wants to resolve an issue with its Autopilot function. The National Highway Traffic Safety Administration (NHTSA) is concerned about a number of crashes, and this is their answer. A pre-market decline of approximately 1% was observed in Tesla's stock, as per a video report published by Yahoo Finance.

Specifically, the recall's nature highlights Tesla's dependence on software solutions. It's uncertain if physical servicing is still necessary because the recall may be fixed with an over-the-air update. Consequently, this situation emphasizes how important Tesla's Full Self-Driving (FSD) capability is as a key selling factor, even though the recall has put this feature under investigation.

Curiously, the investigation becomes more intense when a Washington Post study connects eight collisions that resulted in serious or fatal injuries to the deployment of Tesla's Autopilot in situations that the firm determined were inappropriate. 

Given this, analysts believe that there is a short-term danger that the current events could erode customer confidence in Tesla. After the recall announcement, TSLA's share price has already dropped to $231.31 on the Nasdaq. a daily decline of 2.23% that has already rebounded from its lowest point of $228.20.

TSLA stocks on NASDAQ, hourly chart. Source: TradingView

The desire for Tesla automobiles may be impacted in terms of sales by growing regulatory requirements for transparency. The corporation, like other traditional automakers, has lowered prices both domestically and internationally in an effort to increase sales in the face of declining demand.

The efficiency of Tesla's dispute resolution procedure and its capacity to win back customer trust are being closely monitored as the company struggles with this setback. Basically, the key to resolving these problems may be a prompt and efficient software update rollout.