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Tesla shares skidded on Thursday after the electric automaker issued a voluntary recall for 53,000 Model S and Model X vehicles built between February and October 2016.

Shares in the automaker, which recently replaced General Motors as the largest US auto company by market value, fell as much as 1.7 per cent to $300.23 before trimming its losses to about 0.9 per cent by pixel time.

Tesla said in an email to clients that it discovered a “potential manufacturing issue with electric parking brakes” on some of its Model S and falcon-winged Model X vehicles that “could prevent the brake from releasing”. Specifically, it said the vehicles may contain a small gear that could have been manufactured improperly by a third‑party supplier and that only 2 per cent of the vehicles are impacted.

The Palo Alto-based automaker said no accidents or injuries had stemmed from the issue. The company noted that “we don’t believe this issue could ever lead to a safety concern for our customers” and said it would be “overly cautious” and replace the parts to ensure that no issues arise.

Tesla came under the scanner following a fatal crash last year involving its semi-autonomous Autopilot technology. The US National Highway Traffic Safety Administration (NHTSA) said earlier this year there was insufficient evidence of a technical fault to warrant a recall of the cars.

Sentiment on Tesla shares has picked up once again on upbeat deliveries, as the company plans to begin production of its eagerly awaited mass-market Model 3 vehicle and a semi-truck later this year.

Copyright The Financial Times Limited 2017. All rights reserved.
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