Tesla Recalls Some Model S Cars for Manufacturing Flaw

Tesla Motors Inc. (TSLA), the electric-car maker whose stock has more than tripled this year, is recalling 1,228 Model S sedans in the U.S. for a manufacturing flaw that could put back-seat passengers at risk in a crash.

Tesla announced the recall on its company blog. The recall affected Model S sedans made from May 10 to June 8, with the number of vehicles specified on the U.S. National Highway Traffic Safety Administration website.

Shares rose 1.2 percent to $104.68 at the close in New York. Palo Alto, California-based Tesla has surged 209 percent this year, compared with a 14 percent gain for the Russell 1000 Index.

The move is the company’s first recall and follows a first-quarter profit, the first in its history. Tesla also repaid a U.S. Energy Department early. Both the profit and loan repayment spurred Tesla’s shares to rise.

Chief Executive Officer Elon Musk wrote on the company’s blog that Tesla hasn’t received any consumer complaints about the defect, which it discovered during the manufacturing process.

The flaw “reduces our confidence that the left hand seat back will be properly retained in the event of a crash,” Musk wrote.

Affected owners will be contacted “in the next few days,” Musk wrote, and the company “will pick up the car at a location of the owner’s convenience, provide a Model S loaner if needed, perform the work and bring the car back to the owner a few hours later.”

To contact the reporters on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net; Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editors responsible for this story: Bernard Kohn at bkohn2@bloomberg.net; Jamie Butters at jbutters@bloomberg.net

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