Electric vehicle (EV) maker Tesla (NASDAQ:TSLA) has faced a tumultuous week with a stop-sale order on its Cybertruck, mass layoffs and the departures of a number of its key executives. Now, the firm will also have to contend with a recall of almost 4,000 of its Cybertrucks.
Here’s what investors should know as TSLA stock trends today.
Tesla and the Cybertruck Recall
Tesla was ordered to recall nearly 4,000 Cybertrucks due to issues with their accelerator pedals. Among the Cybertrucks to be recalled are those made between Nov. 13, 2023 and April 4 of this year.
Under certain circumstances, “the pedal [could] become trapped in the interior trim above [it],” according to the National Highway Traffic Safety Administration. One Cybertruck owner reported recently that the vehicle was “accelerating on its own after the accelerator became stuck to the floor when a rubber cover came loose,” per NBC.
Tesla committed to fixing the issue at no cost to the owners of the recalled Cybertrucks. The company blamed the problem on a lubricant used on the pedals. The EV maker added that, by pressing on the brake pedal, drivers should be able to stop their EV in the case of a trapped accelerator.
More Recent Issues
On top of this development, Tesla recently decided to lay off more than 10% of its employees worldwide. As reasons for the layoffs, CEO Elon Musk cited a “duplication of roles and job functions in certain areas” as well as a need to reduce the EV maker’s expenses and raise “productivity.”
Meanwhile, earlier this week, Tesla’s Senior Vice President of Powertrain and Energy and Vice President of Public Policy and Business Development both resigned from the automaker.
Yesterday, Deutsche Bank downgraded TSLA stock to “hold” from “buy,” citing Tesla’s apparent decision to delay the production of its low-cost Model 2. The firm thinks that the decision will wind up depressing the company’s delivery totals until at least 2026.
The Price Action of TSLA Stock
Shares of Tesla are down 12% for the past five trading days. TSLA stock is also down 40% so far this year.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
