Tesla TSLA is recalling 376,241 vehicles in the United States due to a power steering assist failure that could make steering more difficult, especially at low speeds, increasing the risk of an accident. The recall comes after a year-long investigation by the National Highway Traffic Safety Administration (“NHTSA”), following reports from Tesla owners about steering issues. Per NHTSA, more than 50 vehicles were towed due to the problem.

Per an earlier Reuters report, since 2016, tens of thousands of Tesla owners have encountered premature failures in suspension or steering components. Per a safety recall report posted on the NHTSA site, the recall affects Model 3 and Model Y vehicles manufactured for the U.S. market between Feb. 28, 2023, and Oct. 11, 2023, which were running an older software version. 

The printed circuit boards in the affected vehicles’ steering systems could become overstressed, potentially leading to power steering failure when the car stops and then accelerates. If the power-assisted steering fails, drivers must use greater force to steer, heightening the risk of a crash.

As of Jan. 10, 2025, Tesla has identified 3,012 warranty claims possibly linked to this issue. However, the company informed regulators that it was unaware of any accidents, injuries or fatalities related to the defect. To resolve the problem, Tesla is providing an over-the-air software update. The recall follows a similar investigation and voluntary recall in China involving the same steering systems.

In 2024, Tesla delivered 1,789,226 vehicles, down from 1,808,581 reported in 2023. Total revenues of $97.7 billion inched up from $96.8 billion recorded in 2023. After a year-over-year decline in annual deliveries, Tesla expects the vehicle business to grow in 2025 on the back of advancements in vehicle autonomy and the introduction of new products.

TSLA’s Zacks Rank & Key Picks

Tesla carries a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the auto space are Geely Automobile Holdings Limited GELYY, Dana Incorporated DAN and Strattec Security Corporation STRT, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GELYY’s fiscal 2025 sales and earnings indicates year-over-year growth of 66.62% and 149.31%, respectively. EPS estimates for fiscal 2025 and 2026 have improved 15 cents and 38 cents, respectively, in the past 60 days. 

The Zacks Consensus Estimate for DAN’s 2025 earnings implies year-over-year growth of 59.57%. EPS estimates for 2025 and 2026 have improved 20 cents and 40 cents, respectively, in the past 30 days.

The Zacks Consensus Estimate for STRT’s 2025 sales indicates year-over-year growth of 2.61%. EPS estimates for 2025 and 2026 have improved 91 cents and $1.06, respectively, in the past 30 days.

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Geely Automobile Holdings Ltd. (GELYY) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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