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NHTSA "Recall" impact on TSLA

Discussion in 'TSLA Investor Discussions' started by Gwgan, Jan 16, 2014.

  1. Gwgan

    Gwgan Almost a wagon

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    Due date for all documents requested by the Feds including Tesla's assessment and opinion, was just 1/14. Sounds like T was eager to be in compliance as soon as possible and may have had completed the submission early but the agency still needs time for due diligence--I do not know what their work entails but what agency works that fast?
     
  2. Jackl1956

    Jackl1956 Member

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    By the time the NHTSA closes its investigation, Tesla Motors will have surpassed significant milestones. Their decision will be moot.
     
  3. DaveT

    DaveT Searcher of green pastures

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    Short-Term TSLA Price Movements - 2014

    Elon Musk's English Lesson Speaks to Quest to Change Cars - Bloomberg

    From the article:
    Friedman, in his interview, said NHTSA has a dual role of enforcing auto safety and promoting improvements in fuel efficiency. That makes it doubly important to determine whether there’s a defect with the Model S, he said.
    “We’re taking this issue seriously,” said Friedman, who will be the agency’s acting chief when Administrator David Strickland departs this month for a job with the Venable law firm. “People aren’t used to the new challenges that electric vehicles pose.”
     
  4. Jackl1956

    Jackl1956 Member

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    The video embedded in this article is from October.

    Video: Elon Musk Discusses First Tesla Model S Fire

    I expect more from Bloomberg, than amateurish FUD.
     
  5. uselesslogin

    uselesslogin Enthusiast

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    The number one takeaway for me is that Tesla supplied the required information to Tesla within one week. The deadline NHTSA gave them was Jan. 14th. That means a ruling should come soon in my opinion though I could be wrong. I don't think Friedman would highlight the dual role of promoting fuel economy and safety would make sense if they were going to force a recall on Tesla. A recall on Tesla means other manufacturers might be afraid to make electric cars. However, I think NHTSA will recommend maintaining the increase in ride height since my guess is the extra inch would have prevented the 2 impacts from being as serious as they were. If customers are lucky they might suggest allowing customers to enable auto-lowering after getting a warning message. Still I feel there is 0.5" that Model S owners are never going to get back because I think someone measure the new "low" setting and it was already up 0.5."

    Second thing that gets me is that the media is now saying Elon is sparring publicly with NHTSA. However, from his CNBC interview: "I wouldn't sort of characterize this as, you know, being at odds with NHTSA in any significant way. We just wanted to make sure we clarified to customers that they don't need to bring their car in." So the media is basically making up the idea that Elon is sparring with NHTSA when the real reason he tweeted is because the news reports released right before their press conference were drowning out the good news. I think Elon only has a beef with the media for taking everything out of context and creating controversy where there is none.
     
  6. vgrinshpun

    vgrinshpun Active Member

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    Another significant quote from this article: "Investigators sent a set of detailed questions that the company answered within a week, Musk said Jan. 10"

    There was another article giving some tid bits of the interview with David Friedman which I read as indicating that there will be no recall involving mechanical alterations to the car. We might see another over-the-air update, and I think Elon already knows this (remember his tweet: The word "recall" needs to be recalled).

    Link to the article and more of my musings on this subject: Short-Term TSLA Price Movements - 2014 - Page 57

    I believe that results of the investigation will be published second half of the Jan. and will precipitate a brief sell-off because of the required over-the-air action, which will be followed by massive run-up once the dust settles and market realizes that cost of this "recall" will be negligible, while customer's cars will be fixed overnight.
     
  7. mitch672

    mitch672 Active Member

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    "seeking mediocrity" is already pushing FUD:

    Elon Musk vs. the NHTSA: The battle that Tesla doesn't want • 9:56 AM
    • Kelley Blue Book analyst Karl Brauer thinks Tesla Motors (TSLA -0.1%) CEO Elon Musk made a rookie mistake by rankling the NHTSA this week over what constitutes a recall.
    • Though Musk made a decent point by correcting what many early reports had posted as a traditional recall of Model S cars, a seasoned automobile industry executive would have kept his or her Twitter feed quiet, thinks Brauer.
    • Typically, automakers can negotiate behind the scenes with the NHTSA on the size and scope of a recall.
     
  8. TSLA Siempre

    TSLA Siempre Member

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    in general i agree with this. in that article, though, i did not see that friedman precluded the possibility of a mechanical alteration. i think he was referring to the adapter issue. all told, i am hopeful that the agency will be under friedman's direction when the decision is released. from his comments so far, i'm encouraged.

    because of this uncertainty, my belief is that a clean NHTSA result is not already priced in.
     
  9. vgrinshpun

    vgrinshpun Active Member

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    This is true, but the negotiating parties some times make public statements to stake-out a position. I think that when Elon said in CNBC interview a while back that there will be no recall because there is no reason for a recall, he was actually drawing a line in the sand, stating his position. He was ridiculed by the media that was quipping that decision is not his, but NHTSA's... Nice try from the "mediocrity"...

    I think that Elon's reaction to the outdated usage of word recall is actually indication that he is trying to educate public at large before the NHTSA "recall" which would not involve any modifications to the battery, but probably will include some changes to the MS software that would be implemented over the air.
     
  10. vgrinshpun

    vgrinshpun Active Member

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    I've looked on some data for the optional off-road under body plating available on the ICE SUVs. The typical are 3/16" steel plates. The ballistic plate that protects Tesla battery is 1/4" aluminum. Given that yield strength of steel is higher than that of aluminum, the protection provided by 1/4" aluminum plate is roughly equivalent to the 3/16" steel.

    The initial argument would be that if NHTSA is recalling MS and require strengthening of the ballistic plate, how is it that there are no any recalls requiring beefing up of the off-road armor plates? The counter argument, of course, is that due to larger area of the battery, that is exposed to the road derbies, the MS risk of f**e due to such type of accident might be higher than that of a typical ICE. In this context two of the Friedman's statements - electric cars pose different risks, not more - are very significant.

    All of the above leads me to believe that there will be no mandated mechanical alterations as a result of the NHTSA investigation.
     
  11. TSLA Siempre

    TSLA Siempre Member

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    sound reasoning. i don't believe a recall is warranted. still am a little white-knuckled about the possibility of an irrational ruling.
     
  12. vgrinshpun

    vgrinshpun Active Member

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    I can't say that I am wildly optimistic either, it is best described as being cautiously optimistic...

    Given my engineering background I've spent some time pondering what NHTSA investigation can bring. The fascinating thing is that recent flurry of rumors about the possibility of bringing AWD version of MS some time this year initially stroke me as not having any sense, because given that Tesla is focused on two major production rump-ups this year, the AWD associated disruptions to the manufacturing just do not make sense... Until it dawned on me, that all battery impalements were to the front modules, which actually would be protected much better in an AWD MS, because of the bulk of metal contained in drive unit subframe, motor, and reduction gear, all located up-front from the front modules of battery. So my admittedly far fetched idea is that bringing AWD some time this year might be a part of negotiated agreement with NHTSA, because it will allow overall risk reduction of f**e due to impact with road derbies.
     
  13. AudubonB

    AudubonB Mild-mannered Moderator Lord Vetinari*

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    Now Veeger, I know what run-ups are. And I know what ramp-ups are.

    But what YOU wrote...umm...well, the mind boggles.


    ;)
     
  14. vgrinshpun

    vgrinshpun Active Member

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    #14 vgrinshpun, Jan 17, 2014
    Last edited: Jan 17, 2014
    This is based on information that is publicly available.

    The first ramp-up in Q1 per what Elon said during the German visit. In response to complaint from somebody about long waiting time, he indicated that production will be bumped up "quite a bit" in Q4 2013 (the increase from 550 to 600 cars per week probably increased European flow from 150 to 200 cars/week), to be followed by "much more significant" increase in Q1 (IMO from 600 to 800 cars/week).

    The second ramp-up will be starting in Q3, once Panasonic launches the mothballed production line.

    - - - Updated - - -

    Ha! the funniest thing that I did NOT get your post! LOL!
     
  15. ckessel

    ckessel Active Member

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    rump-ups. Isn't that the Miley Cyrus dance move?

    I like big stocks and I can't deny...
     
  16. AlMc

    AlMc 'Senior Moments' member

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    I believe that their will be no recall. NHTSA will conclude that the car is OK as is but will add that TM has taken a 'wise' further step in protecting against battery impalement f**es by an over the air adjustment to ride height. Then, TM will allow full use of the air ride heights with a disclaimer that you need to endorse via the touch screen. This should cover all the bases for both parties.
     
  17. vgrinshpun

    vgrinshpun Active Member

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    Exactly my thoughts. The rumors about restoring the functionality indicated the January timeframe. Coincidence?
     
  18. sub

    sub Member

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    Good thinking, I thought they may do something similar but this makes perfect sense. As far as today's price movement, any reason that it could be held down intentionally due to options expiring?
     
  19. FredTMC

    FredTMC Model S VIN #4925

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    Yes, this would be the best possible outcome. I hope for the scenario. Now I'm starting to think that the only reason there hasn't been a ruling is because the director is leaving and NHTSA wanted to wait till he departed

    - - - Updated - - -

    I think so. TSLA is always heavily manipulated on OpEx days. It wouldn't surprise me at all if they push it up to 170 at close. 168 is holding as the floor.
     
  20. 100thMonkey

    100thMonkey Member

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    It will, IMHO, make no difference if the driver chooses to accept responsibility for f#*#S from running over something with the suspension down low, the press won't care, as long as they get a good image and something to sensationalize. Fixing this issue is not just a matter of making customers happy, it's about protecting the brand from the media effect.

    That said, I personally would like to both drive the car in the low position and know that Tesla has done something to improve resistance to catastrophic punctures by reinforcing at least the front portion of the underbelly... and I'd even be willing to pay for it! Trying to avoid road junk is dangerous, but knowing you could lose your whole car to some piece of metal makes it extra nerve wracking, leaving the driver likely to react and swerve rather than just drive over whatever they see fly out from behind another vehicle. Tesla needs to really make sure they think all this through!!! If Tesla pulls through this sticky wicket leaving everyone confident, the stock will surely respond in kind.

    Any "recall" caused by the NHTSA will only have a short term negative effect on TSLA if it leads to eliminating this worry. Personally, I think most of the damage has already been done, we are in recover now. A real fix could actually be a boost, just as the charging adapter turned out to be for the over heating issue, IMHO.
     

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