Welcome to the Big Leagues, Tesla

The birth of your firstborn. Baby's first steps. High school graduation. Every parent marks the milestones as their child walks the road to adulthood. So today, let's all sign a congratulations card and mail it to Elon Musk, founding "father" of electric car pioneer Tesla Motors (Nasdaq: TSLA  ) :

"Congratulations, Dad! It's a recall!"

They grow up so fast
On Friday, Tesla Motors announced that a faulty cable installed in its second-generation Roadster 2.0 and 2.5 presents a potential fire risk if rubbed the wrong way. Just to be safe, the company's initiating a recall of 36% of the cars it has produced to date.

Granted, at a grand total of 439 vehicles affected (out of a bit more than 1,300 produced), this recall pales when compared with, say, the 33,700 Transit Connect vans Ford (NYSE: F  ) had to recall over the summer. Or the nearly 400,000 Honda (NYSE: HMC  ) Accords, Civics, and Elements recalled in August, the more-than-half-million Nissans that got zapped earlier this year, or the 5 million repairs Toyota (NYSE: TM  ) has performed so far in its unintended acceleration fiasco.

For that matter, even Garmin's (Nasdaq: GRMN  ) recall of faulty GPS units last month probably dwarfs Tesla's news in the scale of inconvenience caused to American drivers. Regardless, for Tesla it's a bar mitzvah of sorts -- its first recall as a publicly traded company. (Tesla was still private when it conducted a smaller recall in 2009, and insulated from the scrutiny that attaches to publicly traded firms, so it gets a mulligan on that one.)

Is that a silver lining?
Tongue removed from cheek now, though, there is true good news here for Tesla as well. If all goes according to plan, the company will produce tens of thousands of Model S electric cars in just a few years. Recalling and replacing 36% of that larger product line would be a major headache for Tesla. So in a way, it's probably "lucky" that Tesla gets to cut its teeth on a more manageable recall exercise like this one.

Because, folks, recalls happen to the best of companies. They're going to happen to Tesla, too. Baby's gotta learn to walk sometime, and it's best to learn while small, while Tesla's got a shorter distance to fall.

Will Tesla find its footing after the recall, or has it "fallen and can't get up?" You tell me, in the comments section below.

Fool contributor Rich Smith does not own shares of any company named above. Ford is a Motley Fool Stock Advisor pick. Try any of our Foolish newsletter services free for 30 days.

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Read/Post Comments (3) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 07, 2010, at 12:32 PM, Melaschasm wrote:

    I do not think this recall will hurt Tesla with its small niche market.

  • Report this Comment On October 07, 2010, at 6:50 PM, nonqual wrote:

    TSLA is going to have 9 figure negative net income for at least the three years; who is going to notice this problem which is likely in the 6 figure range. Elon thanks you tax payers!

  • Report this Comment On October 08, 2010, at 10:58 AM, TMFMarlowe wrote:

    Unlike the forthcoming Model S, the Roadsters are still largely built by Lotus. An electrical problem in a Lotus is about as surprising as the sun rising in the east, which is to say that this doesn't really say anything about Tesla's quality or lack thereof. And yeah, total cost to Tesla for this is likely to be trivial, as nonqual says. Not much to see here.

    John Rosevear

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