Tesla Stock Drops Amid Vehicle Recall and Autopilot Issues

Tesla's stock took a hit recently due to a vehicle recall and Autopilot issues.

The recall, announced in August 2022, affected over 1 million vehicles, including the Model 3, Model S, and Model X, due to a problem with the touchscreen display.

This is not the first time Tesla has faced issues with its Autopilot system, which has been involved in several high-profile accidents.

Tesla's stock price dropped by 4.5% in a single day, a significant loss for investors.

Tesla is recalling 376,000 of its electric vehicles in the United States due to a failure of the power steering assist feature.

This recall follows a more than year-long probe by the National Highway Traffic Safety Administration after some Tesla owners reported steering failures.

Some owners were unable to turn the wheel while others cited increased effort.

Tesla shares fell 3 percent in mid-day trading after the recall was announced.

Worth a look: Tesla Recalls 375k+ Vehicles Due to Potential Power Steering Loss

The recall affects 2023 Model 3 sedans and Model Y crossovers running older software.

If the overstress condition occurs while the vehicle is in motion, steering remains unaffected, but once the vehicle stops, the steering assist may fail and remain disabled when it moves again.

As of January 10, Tesla has identified 3,012 warranty claims and 570 field reports that may be related to the condition.

Tesla said it has no reports of any crashes related to the condition.

The company released an over-the-air software update in October to address the issue but did not file the recall report until this week.

Here are the details of the recall:

This recall marks the automaker's second large recall in 2025, adding to the company's already significant issues with safety and reliability.

Tesla stocks have declined around 10 percent in 2025 after a strong 2024, making it the worst performer in the S&P 500 this year.

Tesla shares fell 3 per cent in mid-day trading after the recall was announced.

The recall follows a more than year-long probe by the National Highway Traffic Safety Administration, which raises concerns about the company's handling of safety issues.

Tesla stock has declined around 10 per cent in 2025 after a strong 2024.

Some top investors, including Tesla chairwoman Robyn Denholm, have been selling off their shares in the past few weeks.

In total, Tesla chairwoman Robyn Denholm sold more than $75 million in shares in the past five weeks.

Tesla board member James Murdoch sold off $13 million worth of stocks on March 10.

Elon Musk's brother, Kimball Musk, sold 75,000 shares of the company, valued at about $27 million.

The company released an over-the-air software update in October to address the issue, but it didn't file the recall report until this week.

As of January 23, 99 per cent of affected vehicles in the US have installed the update, which suggests that the company is taking steps to address the issue.

However, the recall and stock drop have already caused significant financial losses for the company.

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Tesla's Autopilot and FSD capabilities have been a subject of controversy. Tesla's Autopilot, including its paid Full Self-Driving (FSD) service, does not offer autonomous driving and needs human oversight.

Investor expectations of the FSD were likely misled, with Mark Hawtin of GAM Investment Management stating that what Tesla will offer in China is essentially an assisted-driver capability, similar to what they already do in the US or UK.

The US National Highway Traffic Safety Administration (NHTSA) launched an investigation into Tesla's supervised version of FSD software in October 2024, following a collision that resulted in a pedestrian's death.

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Tesla's stock has taken a hit, dropping 3% in mid-day trading after the company announced a recall of 376,000 vehicles in the US.

The recall is due to a failure of the power steering assist feature, which could make the vehicles harder to steer, particularly at low speeds. This could raise the risk of a crash.

Tesla shares have declined around 10% in 2025 after a strong 2024. The company has already issued a recall this year for malfunctioning rear-view cameras, affecting about 239,000 vehicles.

A total of 3,012 warranty claims and 570 field reports have been identified as potentially related to the condition, but Tesla says it has no reports of any crashes. The company released an over-the-air software update in October to address the issue but did not file the recall report until this week.

Here are some key facts about the recall: