Tesla recalls 2.98 million China vehicles over door trap risk

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Reviewed by
Riya DScanX News Team
Key Highlights
  • Tesla is recalling 2.98 million vehicles in China over concealed emergency door releases linked to at least 15 deaths across 12 crashes
  • A separate recall covers 2.74 million China-made Model 3 and Model Y vehicles for a driver-attention monitoring software update
  • The combined actions affect nearly 5 million vehicles, the largest recall Tesla has ever initiated in China
  • The fix involves warning labels and an OTA software update; Tesla is not replacing door hardware
  • China generated $20.96 billion, roughly 22% of Tesla's total revenue, but July retail sales fell 32% YoY as Tesla dropped out of the top 10 NEV brands
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Tesla Inc. is recalling 2.98 million vehicles in China, its largest ever recall in the market, after concealed emergency door releases were linked to at least 15 deaths across 12 crashes where occupants could not escape burning vehicles.

Bloomberg identified the fatalities in cases where occupants or rescuers could not open the doors of burning Teslas after a collision cut power. China's market regulator has confirmed the recall, with the fix limited to warning labels and a software update rather than new hardware.

Why passengers become trapped

Tesla doors normally open with electrically powered buttons, which may stop working if a collision knocks out the car's low-voltage system. Passengers must then locate mechanical releases that the regulator says can blend into the interior. Rear passengers in a Model Y, for example, may need to remove a cover at the bottom of the door pocket and pull a concealed cable.

The recall covers China-made and imported Model 3, Model Y, Model S, and Model X vehicles built between 2018 and 2026. Tesla will attach labels identifying the releases and push an over-the-air (OTA) update that automatically lowers windows after a collision. Tesla is not replacing the door hardware.

A second recall: driver-attention monitoring

A separate action covers 2.74 million China-made Model 3 and Model Y vehicles, requiring an OTA software update to enhance driver-attention monitoring while assisted steering and other driver-assistance functions are active. The update aims to reduce collision risks if drivers fail to react promptly to system prompts. Together, the two actions bring the total vehicles affected to nearly 5 million, marking the largest recall Tesla has ever initiated in China.

Recall component Vehicles affected Fix
Emergency door release (Model 3, Y, S, X) 2.98 million Warning labels + OTA window-drop update
Driver-attention monitoring (Model 3, Y) 2.74 million OTA software update

Door design under scrutiny

Some occupants reportedly survived the initial impact only to die or suffer serious injuries in the fire that followed. Tesla design chief Franz von Holzhausen has said the company is working to combine the electronic and mechanical releases into a single intuitive control for a "panic situation," according to Reuters.

China has banned concealed door handles without mechanical releases on new vehicles from 2027, with existing models required to comply by 2029. U.S. regulators are also considering new emergency-egress requirements.

China market context

China remains Tesla's second-largest market, generating $20.96 billion in revenue, roughly 22% of total revenue, according to its annual report. However, Tesla is losing ground inside the country: July retail sales fell 32% from a year earlier even as China's battery-EV market grew 6%. Tesla fell outside the country's top 10 NEV brands, while BYD remained No. 1 with a 23.5% share, according to CPCA data.

Tesla has faced previous recalls in the region. In December 2024, the company recalled 77,650 Model 3 and Y vehicles due to tire pressure monitoring system issues. Globally, Tesla recalled over 218,000 vehicles in the US regarding rearview camera defects.

How might the decision to rely on software updates and labels rather than hardware changes impact Tesla's brand reputation and consumer trust in China?

Will the upcoming 2027-2029 regulatory bans on concealed door handles force Tesla to redesign its entire vehicle lineup for the Chinese market, and what are the associated cost implications?

Could this massive recall accelerate the shift of market share from Tesla to domestic competitors like BYD, given Tesla's recent 32% drop in retail sales?

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Ross Gerber doubts Tesla FSD capabilities on current hardware

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Reviewed by
Shriram SScanX News Team
Key Highlights
  • Ross Gerber doubts Tesla HW4 chip can support unsupervised FSD
  • JPMorgan note cites need for AI4.5 compute for future scaling
  • Musk claims Tesla and SpaceX will beat revenue growth estimates
  • Tesla shares rose 0.70% to $347.53 in overnight trading
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Investor Ross Gerber expressed skepticism that Tesla Inc. (NASDAQ: TSLA) can deliver unsupervised Full Self-Driving using its existing HW4 chip, citing a recent investor note from JPMorgan Chase & Co. (NYSE: JPM).

Gerber argued on X on Thursday that while the current AI/HW4 stack may run V15 software, it lacks the compute power for true autonomy. He quoted the JPMorgan note stating that Tesla’s future AI4.5 system is designed to handle rising compute demands, implying current vehicles will not become robotaxis.

Hardware Limitations Cited

Gerber stated that the consumer’s Tesla vehicle "will never be a real robo cab." He concluded that the current hardware may not achieve Level 3-4-5 autonomy. This view aligns with his earlier frustration regarding the system’s inability to handle dynamic road conditions in his neighborhood.

Musk Projects Strong Growth

Meanwhile, CEO Elon Musk reaffirmed his bullish outlook for Tesla and Space Exploration Technologies Corp. (NASDAQ: SPCX). He stated both enterprises would exceed bullish revenue growth estimates by the end of the decade.

Market Reaction

Tesla shares rose 0.70% to $347.53 during overnight trading on Thursday. Benzinga Edge Rankings indicate moderate scores for growth and quality, with unfavorable price trends across short, medium, and long terms.

What the Numbers Show

The divergence between Musk’s projection of exceeding revenue estimates and Gerber’s assertion that core autonomous technology is delayed highlights a tension between financial optimism and technical execution timelines.

How might the transition to the AI4.5 hardware architecture impact Tesla's short-term production costs and vehicle pricing strategies?

What are the potential regulatory hurdles for Tesla if it attempts to deploy Level 3 autonomy on existing HW4 vehicles despite technical limitations?

Could the divergence between Musk's revenue projections and Gerber's technical skepticism lead to increased volatility in Tesla's stock price ahead of earnings reports?

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