Tesla Motors, Inc. (TSLA - Free Report) has agreed to settle the lawsuit it filed against a U.S. subsidiary of Hoerbiger, a Swiss auto supplier. Earlier this year, Tesla sued the supplier for problems related to the company’s “falcon wing” doors for Model X.
Tesla had joined forces with the auto supplier to produce a prototype hydraulic system that would open the doors upward instead of sideways. However, the product delivered did not match the quality requirements stated by the automaker. The doors dropped beyond the accepted tolerance levels and were found to be leaking oil both inside and outside the vehicle. The company thus sued its supplier for the additional expenditure as well as over a year’s wasted efforts. Hoerbiger denied Tesla’s charges in Jan 2016, stating it was not responsible for the electronic controls associated with the door.
Per an Aug 18 filing, both companies have postponed filing for a dismissal of the lawsuit as certain conditions of the settlement will not be satisfied until Oct 4. Both have until Oct 13 to file a joint statement regarding the status of the settlement. However, the terms of the settlement have not been disclosed.
Tesla launched Model X in Sep 2015, using electromechanical parts for the door from another supplier in place of the hydraulic system. However, several customers complained that the doors did not latch properly or the sensors failed to work well. Originally the automaker had also demanded punitive damages for negligence from Hoerbiger, but dropped the claim later.
Tesla currently carries a Zacks Rank #3 (Hold).
Some better-ranked auto stocks include Cooper-Standard Holdings Inc. (CPS - Free Report) ,Standard Motor Products Inc. (SMP - Free Report) and Douglas Dynamics, Inc. (PLOW - Free Report) .
Cooper-Standard has witnessed positive estimate revisions in the last 60 days and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Standard Motor Products, a Zacks Rank #1 stock, has a long-term expected growth rate of 15%.
Douglas Dynamics has seen its estimates move north in the last 60 days. The stock sports a Zacks Rank #1.
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