Tesla Recalls 3 Mln Cars In China Over Hidden Door Handles; Shares Drop

(RTTNews) - Tesla Inc. is recalling around 3 million vehicles in China citing safety concerns with hidden door handles. The recall is part of a mass effort in the country, in which eight other automakers, including XPeng Inc., Xiaomi Corp. and Geely Automobile Holdings Ltd., join to call back a total of 4.3 million vehicles over concerns that doors may be difficult to open in an emergency.

In the early morning trading on Nasdaq, Tesla shares were losing around 2.78%, trading at $352.79.

The hidden emergency door releases, which is a signature feature of electric vehicles or EVs, cause occupants, especially children, to trap inside the car in the event of a crash or a fire.

Tesla reportedly said it was recalling some of its Model 3, Y, S and X vehicles as door handles are difficult to identify and operate because their colour is similar to the interior trim.

Elon Musk's vehicle maker said, "In extreme situations such as a severe collision causing the vehicle's low-voltage system to fail, this could hinder occupants from quickly opening the doors to escape and impede rescue efforts by those outside the vehicle, posing a safety hazard."

Tesla and other affected carmakers reportedly plan to place warning labels on the recalled vehicles with hidden door handles to help occupants identify the emergency door releases. They will also issue a software update to automatically lower a vehicle's windows after a crash.

In China's biggest car recall, Tesla's around 2.98 million Chinese-made vehicles are affected, while the recall also includes EVs by Chinese carmakers XPeng, Xiaomi and Geely.

The move follows two fatal crashes in China involving Xiaomi EVs, with power failures suspecting to have prevented doors from working properly. In February, Chinese authorities had announced a ban on hidden door handles following a two-year review.

New rules will take effect in China on January 1, 2027, in which cars with mechanical release on both the inside and outside of their doors will only be allowed to be sold.

Tesla's door handles were in issue in U.S. too, with after US safety regulators initiated a probe following reports of children getting trapped in the cars as the doors suddenly stopped working.

The US National Highway Traffic Safety Administration in July suggested creating a new formal safety standard for all carmakers.