Why an analyst sees Tesla’s latest recall as a ‘positive’ for the EV maker

Tesla Inc.it is TSLA final reminder related to FSD Beta software, although “confusing” may still turn into “positive” for the Elon Muskelectric vehicle manufacturer, Wolf Funds Managing partner Andrew Murphy said Tuesday.

What happened: Tesla is recalling a beta software feature of more than 53,822 of its Model S, X, 3 and Y electric cars in the United States that include a setting for cars to override stop signs.

“It was certainly confusing to understand why they were deliberately allowing an illegal maneuver in a computer system. I think they’re trying to recreate the natural driving habits of any human driver, which is usually a slight rolling stop,” Murphy said during from a discussion with a fellow analyst and co-founder of Loup Funds. Uncomfortable Munster.

The rolling stop feature is available on the new version of Tesla’s Autopilot or on the beta version of the full self-driving software.

Tesla owners wouldn’t have to visit a service center as the feature will be removed via a free over-the-air software update.

“But I think they made a mistake there and they’re getting a slap in the face for it,” Murphy said.

The analyst said auto recalls are usually a “nightmare” for automakers because vehicles must be recalled to a physical location and involve costs. Tesla’s software recall is different.

“A software recall is so much easier in the new world order where Tesla can recall software and update it automatically. It goes from what I consider negative for Tesla to a positive: the fact that they can adapt and respond to the latest regulatory environment with a simple software update.”

See also: Tesla’s gross margin focuses on Q4 earnings as investors seek Apple-like growth: Munster

Musk responds: Musk took to Twitter on Tuesday to say there were no safety concerns with electric cars. The cars, he said, only slowed to about 3 km/h and kept moving if there were no cars or pedestrians in sight.

Musk was responding to a tweet that attacked a reporter for allegedly twisting the story. The world’s richest person called the journalist a “lobbyist” in his post on the microblogging site.

Price action: Shares of Tesla closed up 0.58% at $931.25 per share on Tuesday.

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