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Tesla Inc. is recalling 2.98 million vehicles in China, its largest recall ever in the country, because passengers may be unable to find and use the emergency door releases after a crash cuts power.
Bloomberg has identified at least 15 deaths across 12 crashes in which occupants or rescuers could not open the doors of burning Teslas. For now, the fix is warning labels and a software update, not new hardware.
Why Tesla Passengers Can Become Trapped
Tesla doors normally open with electrically powered buttons, which may stop working if a collision knocks out the car’s low-voltage system.
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Passengers must then locate mechanical releases that China’s market regulator says can blend into the interior. Rear passengers in a Model Y, for example, may need to remove a cover at the bottom of the door pocket and pull a concealed cable.
The recall covers China-made and imported Model 3, Model Y, Model S and Model X vehicles built between 2018 and 2026.
Tesla will attach labels identifying the releases and push an over-the-air update that automatically lowers the windows after a collision. Tesla is not replacing the door hardware.
A Design Tesla Is Already Rethinking
Some occupants reportedly survived the initial impact only to die or suffer serious injuries in the fire that followed.
Tesla design chief Franz von Holzhausen has said the company is working to combine the electronic and mechanical releases into a single intuitive control for a “panic situation,” Reuters reported.
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China has banned concealed door handles without mechanical releases on new vehicles from 2027, with existing models required to comply by 2029.
U.S. regulators are also considering new emergency-egress requirements. The real financial risk may be less about this recall and more about redesigning Tesla doors worldwide.
Traders Bet Tesla Shrugs It Off
China remains Tesla’s second-largest market, generating $20.96 billion last year, roughly 22% of total revenue, according to its annual report.
But Tesla is losing ground inside the country: July retail sales plunged 32% from a year earlier even as China’s battery-EV market grew 6%.
Story Continues
Tesla fell outside the country’s top 10 NEV brands, while BYD remained No. 1 with a 23.5% share, according to CPCA data.
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Despite Tesla’s China struggles, Kalshi traders give it a 50% chance of delivering more than 500,000 vehicles in a single quarter by April 2027. That would surpass its current quarterly record of 495,570.
Polymarket gives the stock a 66% chance of touching $360 in August and a 6% chance of dipping to $300. The stock is currently trading around $345.
Labels and software may keep recall costs low. The bigger risk is mounting pressure in China and a costly global door redesign.
Image: Shutterstock
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