Tesla (TSLA) To Recall Model X Over Faulty Seat Lock System

Per Reuters, Tesla Inc. (NASDAQ:TSLA) reported to recall 11,000 units of its Model X sport utility vehicles, globally . The vehicles to be recalled have a defective rear seat locking system that increases chances of the seats falling forward during a crash, thus putting the passengers in serious peril.

The recalled Model X vehicles were manufactured between Oct 28, 2016 and Aug 16, 2017.

Per Tesla, nearly 3% of the total units recalled has a faulty lock issue.

Tesla Inc. Price and Consensus

The company will mail their customers, who own the affected Model X vehicles and will also arrange for a much-needed service session. Good news is that fixing the issue will be hassle-free as no additional parts will be fitted in. Only a few cables in the second row fold-flat seats require to be adjusted.

Earlier in April, Tesla had recalled roughly 53,000 2016 Model S and Model X vehicles due to a fault in the parking brake.

Price Performance

Shares of Tesla have surged 66.4% year to date, substantially outperforming the industry’s 26.3% rally.

Zacks Rank & Key Picks

Tesla carries a Zacks Rank #3 (Hold). Some better-ranked auto stocks are Adient PLC (NYSE:ADNT) , Cummins (NYSE:CMI) and Daimler AG (OTC:DDAIF) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Adient has an expected long-term earnings growth rate of 10.6%.

Cummins has an expected long-term earnings growth rate of 12%.

Daimler has an expected long-term earnings growth rate of 2.8%.

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