Tesla Motors Inc (TSLA) CEO Takes On Regulator Over Adaptor ‘Recall’

Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk is now waging a war with the industry’s regulators over semantics, a necessary step which the billionaire calls a crusade to revolutionize the car, says a report from Bloomberg.

The move may backfire

The flutter started when U.S. National Highway Traffic Safety Administration (NHTSA) started probing into the battery fires in the Model S last year. The issue ignited when the NHTSA said that a ‘recall’ was being done to bring down the risk during recharging.  To this the infuriated CEO Elon Musk replied in a tweet that the word ‘recall’ should be recalled.

Musk wants to avoid any such negative image of the Model S which would discourage customers in a safety conscious market. However, entering into a discussion with the traffic safety administrator could work against Tesla as it could motivate the regulator to force a fine upon Tesla for millions of dollars for not reporting the safety defects.

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Kelley Blue Book executive editorial director Jack Nerad compared the reaction of Musk to a rookie, who is new in the car business. He added that a seasoned auto executive will not speak against the administration.

Tesla vehicles safer than petrol cars

Car manufacturers settle their scores with the administration by negotiating with them on the scope and timing of recalls.  These negotiations could help the automakers to recall few models of some specific year, or models made in specific factories, narrowing the cost to them.

“Because Tesla gets so much attention, the (administration) rides us pretty hard,” Mr. Musk said. “People are going to think our car has a greater propensity for fire than a petrol car, which is simply untrue.”

Musk said that there are around 30,000 Tesla Motors Inc (NASDAQ:TSLA) vehicles on the road. The fire count is only one out of 10,000 for the Model S compared to one in 1,300 for the petrol-run vehicles. “We should be applauded for how amazing our car is for never catching on fire relative to a (petrol) car,” Musk said.

Tesla Motors Inc (NASDAQ:TSLA) shares surged 41% from the lows of $120.50, with much of the support coming after the company announced that its fourth quarter sales have outpaced targets. However, they are still down around 12 percent from their record high in September.