China’s quality watchdog announced that Tesla, Inc. (TSLA - Free Report) will recall total 8,898 Model S vehicles in the mainland, per Reuters. The recall in China will commence from Jun 28, 2018. This is part of the broader recall, announced by the Palo Alto, CA-based electric vehicle-maker in March 2018.
Notably, in March, the company voluntarily announced to recall 123,000 units of the luxury Model S sedans across the globe to fix faulty steering components. The company informed that the recall includes Model S vehicles which were built before April 2016 and is devoid of any Model X or Model 3 versions. The company also explained that excessive corrosion in the power steering bolts led to this recall. This glitch might result in reduced power steering.
The issue of recall is affecting automakers badly. Earlier this month, Ford Motor Company (F - Free Report) announced two recalls in North America to fix issues that can affect the control of transmissions on its 2017 and 2018 models. The first recall comprises of approximately 347,425 units of F-150, F-650 and F-750 trucks as well as Expeditions of 2018 model-year while the second recall includes 161 units of F-150, Expeditions, Lincoln Navigators and Ford Mustangs.
In the past six months, Tesla has underperformed the industry it belongs to. The company’s shares have plunged 18.3% compared with the industry’s decline of 14%.
Currently, both Tesla and Ford carry a Zacks Rank #3 (Hold). You can see tthe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A couple of better-ranked stocks in the auto space are Honda Motor Co., Ltd. (HMC - Free Report) and Allison Transmission Holdings, Inc. (ALSN - Free Report) , each sporting a Zacks Rank #1
Honda has an expected long-term growth rate of 5.2%. Past year, shares of the company have returned 19.2%.
Allison Transmission has an expected long-term growth rate of 10%. Past year, shares of the company have returned 8.6%.
Toyota has expected long-term growth rate of 6.1%. The shares of the company have advanced 18.6% in the past year.
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