Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Tesla's "Recall" Isn't Actually a Recall At All

News spread quickly on Tuesday that Tesla Motors (NASDAQ: TSLA  ) had issued a recall on a charging adapter for its all-electric Model S sedan. However, the action in question isn't, in fact, a recall. In a letter to the National Highway Traffic Safety Administration over the weekend, Tesla said it would issue a "voluntary recall" of its NEMA 14-50 power adapters because of a possible defect that may cause excessive heating and in some cases electrical fires.

Here's where things get interesting: Tesla says it can fix the problem with an over-the-air software update. Specifically, the update would enable the car's onboard charging system to monitor the input power and detect problematic fluctuations. If detected, the system would then automatically lower the charging current by 25%, according to the EV maker.

Therefore, as Tesla CEO Elon Musk was quick to point out today on his Twitter account, this isn't a "recall" in the traditional sense. Similar to a laptop computer, the Model S can receive software updates over a WiFi connection that improve the car's performance or, in this case, fix problems. By running an over-the-air update for the charging system, Model S drivers are able to remedy the issue without the added inconvenience of bringing their cars into a Tesla service center.

A blessing in disguise?
While no automaker wants to issue a recall, this situation could actually work to Tesla's benefit -- at least in the sense that it brings public attention to the sheer convenience of owning a Tesla. Looking ahead, more car manufacturers will likely follow Tesla's lead in offering remote servicing capabilities in future models.

In fact, Daimler is already heavily investing in a platform that would allow Mercedes drivers to "add new functions such as predictive cruise control, which lets the car drive itself in some situations-by updating the car's operating system when the technology becomes available, according to Reuters.

Not only are these remote updates convenient for drivers, but they also save automakers such as Tesla a significant amount of time and money. Following three Model S battery fires that resulted after high-speed collisions, for example, Tesla was able to issue an "over-the-air update" that increased the suspension of the car at highway speeds. Moreover, Tesla accomplished this important firmware upgrade simultaneously on thousands of Model S vehicles all over the country without ever physically recalling any cars.

This is the future. And Tesla's technological lead today gives the EV maker a valuable edge over competitors. What's more, having the ability to fix system glitches in real-time should help Tesla maintain its reputation for quality performance, despite the occasional setback.

Crush the market with these growth stocks
They said it couldn’t be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he’s ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen 6 picks for ultimate growth instantly, because he’s making this premium report free for you today. Click here now for access.

Read/Post Comments (0) | Recommend This Article (3)

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2795110, ~/Articles/ArticleHandler.aspx, 9/1/2015 2:31:17 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Tamara Rutter

I've been an analytical writer for The Motley Fool since 2011. I cover the sectors of Consumer Goods, Technology, and Industrials. Connect with me on Twitter using the handle, @TamaraRutter -- I'd love to hear from you!

Today's Market

updated Moments ago Sponsored by:
DOW 16,107.96 -420.07 -2.54%
S&P 500 1,919.23 -52.95 -2.68%
NASD 4,659.44 -117.07 -2.45%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/1/2015 2:08 PM
TSLA $241.89 Down -7.17 -2.88%
Tesla Motors CAPS Rating: **