NIO Inc.NIO, a major Chinese electric vehicle (EV) maker, announced one of the biggest recalls in China’s auto industry. The company is recalling 246,229 electric vehicles because of a software problem that could affect safety. The recall affects three of the company’s popular models, including ES8, ES6 and EC6.
The issue involves software that controls the instrument cluster and the central control screen in these vehicles. In certain situations, the issue may cause both screens to suddenly go black while driving. When this happens, drivers may not be able to see important information, such as vehicle speed, warning messages and system alerts.
The recall covers vehicles manufactured between March 16, 2018 and Jan. 16, 2023. These vehicles are mainly built on the company’s first-generation NT 1.0 software platform. Newer vehicles that use updated software systems are not affected by this issue. The large number of vehicles involved makes this one of the most significant recalls for a domestic EV brand in China.
NIO plans to fix most of the affected vehicles remotely by sending software updates over-the-air (OTA). This means owners won’t need to bring their cars to a service center for the fix. The company will upgrade systems to newer software versions like Aspen 3.5.6 or Alder 2.1.0, which are designed to solve the screen blackout problem. If a vehicle cannot receive the update remotely, NIO will contact the owner and arrange a free offline repair.
Vehicles that already have the latest software installed do not need any updates. This recall highlights how important software has become in modern electric cars. As vehicles rely more on digital displays and computer systems, software problems can directly affect what the driver sees and how the car operates. NIO can fix most cars with OTA updates, showing how advanced these vehicles are, but it also highlights that stable software is essential for safety.
Overall, the recall shows how deeply modern electric vehicles depend on software for both performance and safety. While the issue is significant in scale, NIO’s use of OTA updates allows for a quicker and more convenient fix for most owners. The move also reflects the growing importance of software stability in today’s connected car industry.
Recent Recall Issues for Major Automakers
Toyota MotorTM announced a recall of about 162,000 pickup trucks in the United States, covering 2024-2025 Tundra and Tundra Hybrid models, because of a problem with their multimedia displays. The screens can freeze on a camera view or go completely dark, which may stop the rear-view image from showing when the truck is reversing. This poses a safety concern since drivers rely on that display to see what’s behind them, and Toyota says the defect could mean the vehicles don’t meet federal safety standards.
Ford F is recalling over 116,000 vehicles, including many built at its Kentucky plants, due to a fire risk linked to faulty engine block heaters. The defect can allow coolant to leak and create an electrical short when the engine block heater is plugged in, potentially causing a vehicle fire. Affected models include Ford Escapes (2013-2019), Ford Focuses (2013-2018) and Lincoln MKCs (2015-2016). Warning signs include coolant spots, loss of cabin heat, overheating, wiring smell, or smoke. Owners will be notified by mail, and dealers will replace the block heater for free once available.
The Zacks Rundown for NIO
Shares of NIO have gained 11% in the past six months compared with the industry’s growth of 11.8%.
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From a valuation standpoint, NIO trades at a forward price-to-sales ratio of 0.51, below the industry and its own five-year average. It carries a Value Score of D.
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See how the Zacks Consensus Estimate for NIO’s earnings has been revised over the past 90 days.
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NIO stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
