Tesla refutes suspension issues as US senators ask for recall

It’s the last Thursday of 2023, which means today is the last iteration of the year Critical materials to 2024. Despite this being a slow news week between Christmas and New Years, we’ve still got plenty to talk about, so get straight to it.

Today we are going to discuss debunking Tesla’s claims about its suspension issues. US lawmakers have now gotten involved, meaning an investigation by NHTSA could be ramped up if it continues to receive reports of the alleged defect. Tesla has also been warned by investors that it could lose future sales if it continues to tease its $25,000 budget car and robot taxi (both of which technically don’t exist on the market today). Finally, dealerships are finally starting to sell EVs.

30%: Tesla refutes claims of mass suspension problems in its cars, US senators recommend Tesla to recall anyway

ICYMI: Reuters recently published a damning investigation into whether Tesla tried to sweep suspension-related malfunctions under the rug. Additionally, the report alleges that Tesla not only knew about these failures, but also blamed customers for them by citing “abuse” and “prior damage,” resulting in out-of-pocket repair costs instead of warranty work.

The automaker has since publicly denied the claims, noting that it performed “most” of the repairs under warranty. Reuters previously noted that Tesla made 120,000 front upper control arm repairs alone from January 2021 to March 2022. According to Reuters, vehicle owners paid for 31,000 (26%) of the repairs.

Regardless, the far more worrying figure is that 120,000 of these types of repairs were made. The number of repairs shows that Tesla installed an average of 264 front upper control arms daily. Tesla has sold about 1.9 million vehicles worldwide since its inception by the end of 2022, meaning that these repairs were made to about one in sixteen vehicles on the road at the time Reuters reported.

Even today, that number represents about 2.4% of Tesla’s global fleet, which may still be an alarming enough number to warrant a recall. As such, Democratic Senators Edward J. Markey of Massachusetts and Richard Blumenthal of Connecticut wrote a letter to Tesla and its CEO Elon Musk, concerned that there may be a safety risk based on the investigation, urging the company to issue a voluntary recall:

We are writing with extreme concern following the recent report of Tesla’s knowledge of safety flaws in its vehicles and concealment of the causes of those flaws from the National Highway Traffic Safety Administration (NHTSA). This report puts your January statement that “Teslas are the safest car on the road” into sharp contrast with reality. We urge you to promptly recall all Tesla components that pose a safety risk and correct the record with NHTSA to ensure it does its job properly.

The senators also expressed concern that Tesla is blaming its customers for these failures, saying Tesla can use that excuse to report the problem to the National Highway Traffic Safety Administration.

It bothers us that you blame your customers for these failures. The reporting notes that Tesla has repeatedly attributed the suspension failure to “vehicle abuse” or “driver abuse,” including when NHTSA was justifying why it was not seeking the aforementioned lifting of the suspension in the United States. It is unacceptable that Tesla would not only try to shift the responsibility for the substandard quality of its vehicles to the people who buy them, but also present the same flawed argument to NHTSA.

Now, as Tesla has admitted, it’s no stranger to suspension issues. The car was China forces Tesla to recall most Model S, X models, company responds. Tesla called the appeal “unnecessary” but complied anyway.

Meanwhile, NHTSA says it’s aware of both the recall in China and problems with the suspension of some Tesla vehicles, but hasn’t received a significant number of complaints to take action.

NHTSA aware of Tesla recall due to suspension issues in China. Currently, the agency has not received significant complaints regarding these issues in the United States. The agency is in contact with Tesla and is monitoring the situation closely and will not hesitate to take action to protect the public from undue safety risks.

A quick scan of Model 3 complaints mostly brings up collision warning and phantom braking. There were four suspension-related complaints for the 2021 model year, 19 for 2020, 43 for 2019, and 102 for 2018. previously launched an investigation into a steering-related defect for 2023 Model 3 and Model Ys after just 12 reportsso it is unclear why the agency did not investigate this particular issue.

NHTSA encourages people who currently have (or have had) a safety-related problem with their car to report it so the agency can determine if further investigation is needed. If your Tesla has had these types of problems, you can file a report online.

60%: Investment group tells Tesla to stop pushing its low-cost robot taxi that won’t arrive next year

Tesla CEO Elon Musk has been quite vocal about the company’s efforts to create an electric car that is even more affordable than its Model 3. Figures of $25,000 have been floating around the internet and even in Walter Isaacson’s biography of Elon Musk, which potentially combines the architecture of its affordable vehicle . with a company robotaxi without a driver.

Tesla was rumored to be teasing or even will unveil its $25,000 mass-market EV sometime in 2024. But even if it was revealed, Tesla is unlikely to release the vehicle on time — and that’s a problem for investors, according to investment group Deepwater.

It’s in Tesla’s best interest to keep quiet about Robotaxi. The new car’s selling “feature” is its price, and the introduction of Tesla’s upcoming car would likely have a chilling effect on current low-end Model 3 sales, a risk not worth taking in a year where EV sales will continue to be muted. Additionally, the car will likely be built in Giga Mexico, which we believe won’t be operational until 2027.

The problem is that Tesla, or rather Musk, isn’t exactly known for keeping the clock well. Cybertruck is two years late, three years after it was promised, we still don’t have a million robot axes on the way, and most of the company’s live streams haven’t even started on time. So if Tesla teases its vehicles and consistently misses production targets, the dream of a cheap car could cause people to hold off on buying Tesla’s most affordable Model 3 in hopes of a cheaper entry.

Either way, the timeline and viability of the project is unknown to anyone not directly involved in the company. But with sales expected to decline, and with more market players joining Tesla in the EV space, the automaker must walk a fine line between promoting a new product and continuing to sell its existing models.

90%: More than half of new car dealers now sell EVs

Dealers of new EVs

Dealers are finally starting to sell EVs. A new study by iSeeCars reveals that the number of non-Tesla dealers selling new electric vehicles has skyrocketed over the past three years. In fact, that number more than tripled: from 16.5% of sellers in November 2020 to 55.1% in November 2023.

Used EVs have seen a significantly slower increase in dealer adoption. At the same time, this number increased from 17.1% of sellers to 29.4%. But growth is growth.

Delaware, Rhode Island, Hawaii, Maine and California account for just under one-third of the market share for new electric vehicles. They also account for the highest concentration of new car dealers that sell electric vehicles, from 81.8% of dealers in Maine to 65.3% of dealers in California. Inversely; Idaho, Louisiana, Mississippi, Wyoming and Montana have the lowest percentage of dealers selling new electric vehicles, accounting for only 12.6% of the market share.

Monthly dealership sales also correlate with EV sales adoption. As new vehicle sales increase, the dealer is more likely to sell EVs. In November 2023, only 34.1% of smaller dealers with less than 50 monthly sales sell EVs, while 87.2% of dealers with more than 1,000 monthly sales sell EVs. This can probably be attributed to the initial cost of the vehicles and the support issues of servicing and charging requirements.

Selling EVs seems to be a somewhat polarizing topic for new car dealers. The Ford dealership backed out against the changes enough for the automaker to change its mandatory requirements in the dealership program. Also, almost half of the US GM Buick dealerships bought back a place to sell battery-powered electric cars.

Despite this, these metrics collected by ISeeCars make it clear that most dealers are interested in anything that keeps the green going – and upcoming tax incentives at the time of sale (Plus federal money boosting charging experience), it is a clear win for many.

100%: What does the future hold for dealerships?

Nissan begins using Class 8 BEV trucks to deliver cars to LA-area dealers

The automotive industry changes with time. Automakers have explored moving direct-to-consumer sales, but regulation has stymied that move across the country. This leaves some adjustments to be made for the dealer model to handle the drop in service revenue with less complex EVs.

A new white paper was published earlier this month CDK Global which explored how EVs are serviced today and how they might be serviced in the future, and the biggest thing I took away from it is that dealers need to get in the tire game. (No surprise, especially since I’ve been ripping through a set of Pirelli P-Zero tires on my Model 3 Performance for only 13,000 miles.)

So how can automakers and dealerships compensate for the reduction in overall service needs for EVs in the future? Increased sales? Limits on software upgrades or subscriptions? What do you say?