Tesla Recalls Roughly 135,000 Vehicles Over Touch-ScreenFailures

Tesla is about to recall 135,000 automobiles,reports The Wall Street Journal (Feb. 2,2021). Recalls occur after the delivery of an item to acustomer. As noted in Chapter 6’s “Cost of Quality” section in yourtextbook, their external failure costs can be costly. Inparticular, this recall means that the direct costs to Tesla willinclude the “cumbersome physical repair” (according to Tesla); thecost of the computer chip that needs to be replaced; the cost ofreimbursement for the 23,000 owners who paid out of pocket for therepair before the recall; and the cost of informing Tesla’s servicecenters and owners about the recall. Your text also notes thatthere may also be a loss of goodwill or possibly liabilitycosts.

The Tesla recall has to do with the touch screen control. Itsfailure can impact many different features, including backupcameras, defog and defrost controls, turn signals, heat, andair-conditioning. Tesla claims that the touch screen should last5-6 years. This is analogous to the Mean Time Between Failures(MTBF) in Chapter 17’s discussion of Reliability. But the NationalHighway Traffic Safety Administration (NHTSA) expects thetouchscreen to last “at least the useful life of thevehicle.”

Tesla, of course, is not the only automobile manufacturer toexperience recalls. According to NHTSA, from 2000 to 2019,there has been 14,791 vehicle recalls in the U.S., affectingroughly 680,000,000 vehicles. Over 90% of the recalls were forsafety reasons, whereas the other recalls were for non-compliancewith federal standards. Manufacturers voluntarily initiated 80% ofthese recalls, while the NHTSA instigated the remainder.

Questions:
1. Have you been affected by the recall of any product?
2. What will be the major cost to Tesla for this recall?