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Highlights:
- Cybertruck Recall: Tesla recalled over 27,000 Cybertrucks due to rear-view camera issues, increasing the risk of crashes.
- Debt Deal: Tesla is premarketing a $783 million asset-backed securities (ABS) deal backed by car leases, its second ABS deal of 2024.
- Stock Drop: Tesla’s share price fell 3.4% in after-hours trading, wiping $23 billion from its market value.
Tesla Inc (NASDAQ:TSLA) shares fell sharply after hours, dropping 3.4% and wiping $23 billion from its market value, following a major recall of its Cybertruck vehicles. The recall, which impacts over 27,000 Cybertrucks delivered in 2024, marks the fifth recall for this model year and is tied to a critical issue with the rear-view camera system. Meanwhile, Tesla also revealed plans for a $783 million asset-backed securities (ABS) deal, its second such transaction of the year, backed by car leases.
Cybertruck Recall Due to Camera Malfunction
Tesla’s latest recall addresses a problem with delayed images on the rear-view camera, a malfunction that could heighten the risk of crashes. The recall affects the majority of Cybertrucks delivered in 2024. This marks the fifth recall of the vehicle this year, adding to growing concerns over production and quality control issues in Tesla's highly anticipated electric truck lineup.
Tesla Announces Debt Deal Amid Recall
In conjunction with the recall news, Tesla announced a $783 million debt deal backed by car leases. This is the second asset-backed securities (ABS) transaction for the electric vehicle (EV) maker in 2024. While the ABS deal is aimed at leveraging Tesla’s growing leasing portfolio, the timing of the announcement alongside the recall has contributed to market volatility.
Stock Plunge Wipes Billions from Tesla’s Market Value
Following the recall announcement and debt deal, Tesla shares dropped $8.36 in after-hours trading, settling at $240.66. The sharp decline erased $23 billion from the company’s market value, further adding to the challenges Tesla faces as it navigates production issues and seeks to strengthen its financial position through debt financing.
