Tesla Stock Rockets Despite Hazardous Adapter Recall

    January 15, 2014

The fourth quarter was a definite success for Tesla Motors Inc.

The electric car maker indicated yesterday that its Model S sedan deliveries surpassed original predictions by 20 percent. As Tesla delivered about 6,900 sedans during the quarter, shares shot up by almost 16 percent.

“We look forward to 2014 with anticipation,” said Jerome Guillen (vice president of global sales and service) at a Detroit Auto Show news conference, adding, “On the sales and service side – of which I’m responsible – it’s reckless growth.”

Guillen later corrected himself, saying he misspoke and meant to say “relentless growth”; however, speculators might call this a Freudian slip, given the less optimistic press Tesla got on Tuesday when U.S. safety regulators classified Tesla’s move to upgrade wall adapters and charging software as a “recall”. The National Highway Traffic Safety Administration claimed in documentation that, “An overheated adapter, cord, or wall receptacle, increases the risk of burn injury and/or fire.”

These safety statements follow the company’s Friday announcement and Sunday letter regarding a small number of fires relating to the adapters.

Tesla announced it would provide new adapters and software upgrades to customers to avoid charging system overheating, but C.E.O. Elon Musk quickly disputed the NHTSA’s choice of words via Twitter. He explained that the software upgrade was done last month over the air and that owners would receive the new adapters via mail.

Although the company says it will recall 29,000 chargers, it has denied that the charger itself was the cause of the fire.

Musk declared that the software update “alone addresses any potential risk,” before describing the strategy: “I call it a belt and suspenders approach, so even though we feel very confident about the software update, the adapter is something that provides additional surety.” He then added, “We just want people to have absolute peace of mind.”

“Peace of mind” is something Tesla investors can also look forward to maintaining, as the company’s stock continues to ascend and remains unaffected by the adapter matter. Per Guillen, the company expects its global sales and service locations to double in 2014. Meanwhile, Tesla’s Model X crossover is still in progress, as they are “feverishly” working to introduce it later this year.

Image Via Youtube