Tesla recalls more than 1.6M cars in China for remote software fix

Tesla is recalling 1.68 million cars in China for a remote software upgrade to ensure that they warn the driver when the trunk is not locked shut, China's market regulator said.

The announcement late Tuesday also said that vehicles with faulty trunk latches will be repaired free of charge. The recalls affect some imported Model S and Model X vehicles and domestically made Model 3 and Model Y cars manufactured between October 15, 2020 and July 17, 2024.

The recall notice said that an unlocked trunk lid could open during driving, interfering with the driver's vision. It did not say whether that had ever happened to any Tesla cars.

The US-based electric vehicle maker will fix the problem through a remote software upgrade, the State Administration for Market Regulation said.

Tesla's Q2 profit falls

China is a major market and production base for Tesla while also a source of growing competition from Chinese EV makers.

The company reported a sharp decline in second-quarter net income last month, as sales fell despite price cuts and low-interest financing.

The Austin, Texas, company said that it made $1.48 billion from April through June, less than the $2.7 billion it made in the same period of 2023. It was Tesla's second-straight quarterly net income decline.

Second quarter revenue rose 2 percent to $25.5 billion, beating Wall Street estimates of $24.54 billion, according to FactSet. Excluding one time items, Tesla made 52 cents per share, below analyst expectations of 61 cents.

Shares of Tesla fell about 8% in trading after Tuesday’s closing bell. The shares had been down more than 40 percent earlier in the year, but have since recovered most of the losses.