Tesla issues major Cybertruck recall over faulty pedal

Tesla (TSLA) has announced a recall of nearly 4,000 units of its highly anticipated Cybertruck electric pickup truck. The recall is due to a potential issue with the accelerator pedal, which could malfunction and pose a safety risk.

Yahoo Finance's Seana Smith and Brad Smith break down the details.

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This post was written by Angel Smith

Video transcript

SEANA SMITH: Let's take a look at another trending stock here on Yahoo Finance this morning, and that is Tesla. Look at that shares, off just about 1%, so paring some of the earlier selling that we did see this morning. Now, more bad news here for the EV-maker, recalling nearly 4,000 of its cyber trucks over faulty accelerator pedal, that can potentially stick here. So that's having a real impact on the stock this morning. So far, they have received notice from two customer claims related to this issue.

But the takeaway here is a couple of things-- one, this is actually also giving us a glimpse into how many Cybertrucks potentially have been sold up until this point. So buried beneath the headline the fact that there has been almost 4,000 Cybertrucks now on the road. That is a number that hasn't necessarily been disclosed in terms of their deliveries so far, production and delivery numbers. But then also just point some more trouble here for a stock, we have been talking about it now time and time again, that has run into trouble. Shares are down about 40% since the start of the year, and Elon Musk and his team are struggling a little bit to turn things around and turn the narrative around on the Street.

BRAD SMITH: Yeah. And you think about ultimately the fact that they just started delivering this vehicle in Q4 of last year. And so the fact that 4,000, as you mentioned, we know that many that actually need to be recalled are out there on the road, that's a significant, well, at least, move forward in the delivery, compared to the overall figure that they have been talking about in recent earnings call, what, a million reservations for the Cybertruck to this point, or at least to the point of the last earnings call. So that particularly shows you-- number one, I think in the recall, it's going to have a broader sentiment impact, as well. You've already heard some of the issues, even from reviewers who had gotten a car to be able to test and saying, all right, this doesn't make the mark on multiple things that Tesla had said it would. And so now it's a larger question of, OK, will this have some type of dent on the sentiment for potential buyers and prospective buyers out there, as well.