US investigating suspension problems in Tesla Model S

Updated on

Tesla’s accomplishments are varied and well-known and most of its highly publicized perceived failures are minor unless it comes to getting a Model X in Canada but even that seems to have been remedied. However, today it was announced that U.S. auto safety investigators are having a look into suspension issues with Tesla Motors Inc (NASDAQ:TSLA)’s wildly raved about Model S sedan and investors worry that a recall could be in the offing, reports Reuters.

Tesla’s suspension issues hardly a quick fix

Bryan Thomas, a spokesman for the National Highway Traffic Safety Administration (NHTSA), said the federal agency is “examining the potential suspension issue on the Tesla Model S, and is seeking additional information from vehicle owners and the company.”

It’s easy to think that Elon Musk does no wrong. That would be a bit foolish if you consider the struggle’s of SolarCity, the failed landings of rockets from SpaceX and delivery and production issues the company often faces. Today, the company announced that it would be providing owners of the Model X with a free sunscreen as the massive windshield simply allows to much light and heat into the vehicle. That’s an easy fix. The windshield in the Model X is massive but that has upsides in both view and safety and you get a free screen designed for the car itself, for free, from the company.

Suspension issues are a whole other animal and the NHTSA doesn’t play around and rarely makes an announcement it doesn’t follow through on when it singles out a company as it did a few hours ago with Tesla.

The review process announced today precedes a formal investigation that often leads to an involuntary recall. While announcing the review, the National Highway Traffic Safety Administration also singled out a potential (mal) portent in saying that the administration also takes issue with a “troublesome nondisclosure agreement” that Tesla apparently has with a Model S owner regarding suspension issues with his or her Model S.

Tesla declined to comment to news outlets today beyond a “we’re looking into it.”

The auto website suggested earlier this week that owners have been complaining about a possible problem the the Tesla Model S that could see  suspension control arms to break causing the driver to immediately lose control of the vehicle.

This non-disclosure agreement may be the crux of the issue

The NHTSA said today that it “learned of Tesla’s troublesome nondisclosure agreement last month. The agency immediately informed Tesla that any language implying that consumers should not contact the agency regarding safety concerns is unacceptable, and NHTSA expects Tesla to eliminate any such language.”

Adding that Tesla Motors Inc (NASDAQ:TSLA) “told NHTSA that it was not their intention to dissuade consumers from contacting the agency. NHTSA always encourages vehicle owners concerned about potential safety defects to contact the agency.”

Thankfully for shareholders the announcement was made near the close of trading of Thursday. That, however, was bittersweet in its timing. The stock still had an opportunity to drop sharply before the NASDAQ closed for the day after trading up a bit from Wednesday’s close for most of the day. Tesla closed at $229.36 and was trading at $233.45 prior to the announcement. The drop caused the stock to close down $6.16 for a loss of 2.16% on the day.

In after hours trading, Tesla Motors Inc (NASDAQ:TSLA) is at $227.50 (5:08 EDT) down nearly another percentage point.


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