What Prompted Tesla to Redesign Its Model Y Door Handle?

Tesla, Inc. TSLA is exploring a redesign that would integrate the electronic and manual door-release mechanisms, which are currently positioned separately, per the Bloomberg News podcast with Franz von Holzhausen, Tesla’s chief designer, cited by Reuters. The change aims to make door handles more intuitive, particularly in a panic situation.

The U.S. National Highway Traffic Safety Administration (NHTSA) has launched an investigation into roughly 174,000 Model Y vehicles from the 2021 model year following reports that electronic door handles may fail. While Tesla cars include manual release options inside, the agency noted that children might struggle to reach or operate them, even if drivers are aware of their presence.

Per NHTSA, the issue seems to arise when the electronic door locks do not receive enough voltage from the vehicle. Per repair records, the problem was often resolved by replacing the low-voltage battery, but owners reported that no low-battery warnings appeared before the exterior door handles failed.

Both Tesla and NHTSA declined to comment to Reuters. Per the Bloomberg report, cited by Reuters, the company is reviewing reports that a top Chinese regulator may consider banning fully concealed door handles. Since 2018, NHTSA has received more than 140 consumer complaints regarding Tesla doors becoming stuck, failing to open or malfunctioning.

In 2023, Tesla recalled more than 120,000 Model S and Model X vehicles in the United States due to the risk that doors could unlock and open during a crash. TSLA carries a Zacks Rank #4 (Sell) at present. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Tesla’s Rival Addressing Safety-Related Concerns

Ford Motor Company F is recalling 101,944 Taurus sedans in the United States due to a defect that may cause the B-pillar trim on the driver and front passenger doors to detach while driving, per NHTSA. If the trim comes loose, it could fall onto the roadway and create a hazard. Ford dealers will examine the affected vehicles and repair or replace trim, free of cost.

Stellantis N.V. STLA is recalling around 164,000 Jeep vehicles in the United States over an issue involving the potential detachment of door trim. The recall applies to a few Chrysler Jeep Wagoneer and Jeep Grand Wagoneer models manufactured between 2022 and 2025. The dealers will examine the vehicles and replace the trim if needed at no cost to owners.

Tesla’s Price Performance, Valuation and Estimates

Tesla has underperformed the Zacks Automotive – Domestic industry and the Auto, Tires and Truck sector year to date. Tesla has gained 3.2% compared with the industry’s growth of 4.6%, respectively.

 
From a valuation perspective, Tesla appears overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 12.82, higher than its industry’s 3.18.

The Zacks Consensus Estimate for 2025 and 2026 EPS has moved down 11 cents and 19 cents, respectively, in the past 60 days.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research