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Tesla Sales Spike Amid Recall Confusion

Is the National Highway Traffic Safety Administration ready for an onslaught of Web-connected cars? Ummm, no.

On Tuesday, the NHTSA issued a recall notice for Tesla Motors’ (TSLA) all-electric Model S sedan. The safety body said that 29,222 of the cars were delivered with adapters and cords that could overheat while charging. The notice came with the headline “RECALL Subject: Plug in vehicle charger/Possible fire.”

It all sounds pretty awful and devastating for Tesla until you realize that recall does not mean recall in any familiar sense of the word. Tesla can fix the problem by sending out a software update via its over-the-air network and by mailing out some new adapters. Go to sleep with fire hazard in the garage. Wake up with no fire hazard. “While NHTSA may call this a recall, we call this modern technology,” said Jerome Guillen, Tesla’s vice president of worldwide sales and service, at a press conference today at the Detroit auto show. Tesla quite often fixes glitches and adds features to its car via these software updates, much as Microsoft (MSFT) and Apple (AAPL) do with computers they made.


It wasn’t all semantic scrapping for Tesla today. The automaker also issued a statement saying it had shipped close to 6,900 vehicles in the fourth quarter, up from a forecast of about 6,000. The sales figures trumped the recall woes for investors, who pushed Tesla shares more than 11 percent higher during the day’s trading, to 155.59.

Vance is a technology writer for Bloomberg Businessweek in Palo Alto, Calif. He is the author of Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future (HarperCollins, May 2015). Follow him on Twitter @valleyhack.

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