Tesla Model 3, Model Y receive German recall order

FRANKFURT -- Germany's road traffic agency said it was recalling Tesla Models Y and 3 cars because of a fault in the automatic emergency call system that affects 59,000 vehicles globally.

The KBA watchdog said on its website dated June 29 that a software flaw was causing a breakdown of the eCall, which is designed to automatically contact emergency responders in the event of a serious accident.

Affected owners were told to call the manufacturer or drive to an authorized repair shop for a software update.

German regional broadcaster Rundfunk Berlin-Brandenburg, which serves the region that is home to Tesla's German Model Y and battery production site near Berlin, first reported the recall on Saturday.

The KBA said 59,129 vehicles were affected globally but did not specify how many of those were registered in Germany.

The software glitch is an added headache for CEO Elon Musk after Tesla on Saturday said it delivered 18 percent fewer EVs in the second quarter compared with the same period last year, as China's COVID-related shutdown disrupted its production and supply chain.

Musk said last month that Tesla's new factories in Texas and Berlin are "losing billions of dollars" as they struggle to increase production because of a shortage of batteries and Chinese port issues.

The U.S. National Highway Traffic Safety Administration (NHTSA) early in June upgraded its probe into 830,000 Tesla vehicles with the advanced driver assistance system Autopilot, a required step before it could seek a recall.

Tesla was not immediately available to comment.

Tesla delivered 254,695 cars worldwide in the three months to June, snapping a two-year streak of quarter-on-quarter gains.

The results, posted Saturday, missed a forecast of 261,181 vehicle deliveries based on an average of analyst estimates compiled by Bloomberg.

That is less than the record 310,048 cars Tesla delivered in the previous three months, but above the 201,250 from the same quarter a year ago.

Tesla faces “ongoing supply chain challenges and factory shutdowns beyond our control,” the automaker said.

The delivery data is a closely watched indicator for Tesla since it provides insights into the electric-car maker’s likely financial performance. The figure also is widely seen as a barometer for EV demand generally, since the Austin, Texas-based company has led the market for battery powered vehicles.

Musk had warned of a “very tough quarter” in an internal memo that was seen by Bloomberg. But the Shanghai shutdown may have made the most recent quarter’s tally something of an outlier.

Musk said earlier this year that he expects production in the third and fourth quarters will be “substantially higher” and that Tesla is on track to expand production to more than 1.5 million vehicles this year.

Tesla does not break out global sales by geography, but the U.S. and China have long been its largest markets. The company currently makes the Model S, X, 3 and Y vehicles and has plans to start production of a pickup, semi-truck and roadster.

In the waning days of the quarter, while Musk maintained his Twitter silence, other executives delivered cars to customers, including design chief Franz von Holzhausen.

Great experience delivering new Teslas all around LA today! LA traffic not so much
— Franz von Holzhausen (@woodhaus2) June 30, 2022

The end of the quarter has often seen employees from across the company pitching in to help deliver cars in the final hours.

Tesla will report second-quarter earnings after the market close on July 20, the company said Saturday.

The annual meeting of shareholder will be August 4.

Reuters and Bloomberg contributed to this report