Tesla stock plummets as report shows China orders dropped by half

Electric-car maker also hit with recalls on thousands of vehicles over seat belts and brake callipers

Tesla issued three recalls due to issues with seat belts and brake bolts, one of which could cause sudden loss of tyre pressure. Reuters
Tesla issued three recalls due to issues with seat belts and brake bolts, one of which could cause sudden loss of tyre pressure. Reuters

Tesla shares tumbled on Thursday after a report that the electric-car maker’s Chinese orders dropped by almost half in May.

The stock, which was already down more than 30 per cent from the late January peak through Wednesday, slid by more than 5 per cent.

Tesla was already down after a US regulator disclosed recalls of more than 5,500 Model 3 and Y vehicles as well as almost 2,200 Model Ys over separate seat belt flaws.

Tesla’s monthly net orders in China dropped to about 9,800 in May from more than 18,000 in April, according to The Information, a San Francisco-based tech news company, which cited a person with knowledge of the data.

This is only the latest in a string of reports that seem to suggest a sales slowdown in a country widely regarded as one of the most important markets for the industry.

Dan Levy, an analyst at Credit Suisse Group AG, said on Wednesday that Tesla’s market share in global electric-vehicle sales had dropped in April, and that the company lost ground in China, Europe and the US.

The US National Highway Traffic Safety Administration posted a notice Wednesday saying the carmaker will inspect, tighten or replace brake callipers that could be loose on almost 6,000 Model 3 and Y vehicles.

Tesla's filing with the agency said it had no reports of crashes or injuries related to the issue and that the company will inspect and tighten or replace the calliper bolts as necessary.

Tesla said that loose calliper bolts could allow the brake calliper to separate and contact the wheel rim, which could cause a loss of tyre pressure in "very rare circumstances".

The company said that, in the "unlikely event" there is vehicle damage from a loose or missing fastener, it will arrange for a tow to the nearest service centre for repair.

The filing said Tesla was made aware in December of a field incident involving a 2021 Model Y vehicle with a missing fastener on the driver-side rear brake calliper.

The company has since taken measures to prevent the loosening of the bolts in the assembly process.

Additionally, Tesla is issuing two new recalls to address seat belt issues, it said on Thursday.

One recall covers 5,530 vehicles, comprising 2018-2020 Model 3 and 2019-2021 Model Y cars, because fasteners that secure the front seat shoulder belt to the B-pillar may not be properly attached.

The other recall covers 2,166 Model Y vehicles from 2019-2021 in which fasteners that secure the left and right second-row seat belt retractors may not be properly attached.

Tesla told the agency it was not aware of any crashes or injuries relating to the seat belt recalls.

Updated: June 4, 2021 12:10 AM

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