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Tesla’s software fixes, the NHTSA’s status quo, and an impending need for updated recall terminologies
It is no secret that Tesla is a popular topic, so much so that the coverage around the company is immense. Couple this with CEO Elon Musk’s rockstar persona and you get a company whose vehicles are looked at under a microscope constantly. It might feel unfair for some, but it’s just the way it is. Tesla — by simply being Tesla — is newsworthy.
Tesla’s newsworthiness is a double-edged sword. A look at the coverage for the company’s vehicle recalls from the NHTSA would prove this point. So notable is Tesla’s news coverage that a mainstream newsreader would likely get the impression that Teslas get recalls frequently. The opposite is true. As evidenced by Reuters in the graphic below, data from January 1, 2020, through February 17, 2022, shows that Tesla actually recalls its vehicles less frequently than some of the market’s leading automakers. Tesla is also the only carmaker performing a large share of its vehicle recalls through over-the-air software updates.
Tesla currently handles the majority of the industry’s remote software recalls, but it would soon not be the only one. New electric vehicle makers have used the idea of software updates as a means to promote their EVs’ capabilities. Rivian has performed OTA updates to its R1 vehicles, and those cars are only starting customer deliveries. Lucid is the same with its Air sedan, with the company rolling out features like Automatic Emergency Braking, Cross-Traffic Protection, Lane Departure Protection, Traffic Drive-Off Alert, and other features earlier this month through a software update. Ford has been rolling out updates called “Power-Ups” to the Mustang Mach-E as well.
Considering that software-based fixes are only bound to get more widespread over the coming years, one must then ask the question: Should software-based over-the-air fixes be dubbed and classified with the same terminologies as physical recalls, which typically involve the replacement of vehicle hardware?
A Vastly Different “Recall” Experience
Any car owner has likely experienced a recall for their vehicle at some point in their driving life. And more likely than not, one’s experience is probably not that pleasant. I certainly count myself among drivers who look at vehicle recalls with trepidation. My current vehicle, a Japanese-made van, was part of a minor fuel pump recall a couple of years ago, and even addressing that took a whole day out of my weekend. The dealer was overwhelmed with the number of cars it was fixing that day, and tempers among owners were flaring by the hour — all for a simple fuel pump replacement. I’ve been told that my experiences with vehicle recalls are not that unique.
In comparison, a software-based fix, such as the disabling of FSD Beta’s “rolling stops” feature, only required affected vehicles to be connected to the internet. There was no dealer visit, no forms to fill out, and no staff to argue with. The car was connected to the internet, a software fix was implemented, and the issue was resolved. One can argue that Tesla’s software fix to disable FSD Beta’s “rolling stops” feature was safety-related, and that’s true. But one could also argue that at least from a driver’s point of view, the experience related to software and hardware-based recalls is vastly different.
The Status Quo
Despite the different experiences involved when software and hardware-based vehicle recalls are addressed, it appears that the National Highway Traffic Safety Administration (NHTSA) will, at least for now, keep the status quo. Teslarati reached out to the NHTSA to inquire if it was considering the adoption of updated terminologies for cars whose fixes are completed through OTA software updates, but the agency suggested that this would likely not be the case, at least for now. According to the NHTSA, vehicle manufacturers must initiate a recall for any repair that remedies a safety risk, regardless of whether the issue is fixed by software update or by hardware replacement.
“The National Highway Traffic Safety Administration is committed to ensuring the highest safety standards on the nation’s roadways. NHTSA is empowered with robust tools and authorities to protect the public, to investigate potential safety issues, and to compel recalls when it finds evidence of noncompliance or an unreasonable risk to safety. Manufacturers are required to initiate a recall for any repair, including a software update, that remedies an unreasonable risk to safety. NHTSA recalls can include any required repair, which includes a software update, to remedy a potential safety risk. Manufacturers are also required to submit any communications to owners, dealers, and others about any software updates that address a defect, whether it is safety-related or not,” the NHTSA stated.
Product recall specialist and associate professor at the Indiana University Kelley School of Business Professor George Ball told Teslarati that while the NHTSA’s use of similar terminologies for software and hardware-based recalls is “definitely an example of regulators and industry moving at a different pace on technology,” the agency’s hesitation in adopting new terminologies for OTA fixes is understandable. Professor Ball further explained that using terms such as “soft recall” to refer to software-based vehicle fixes might imply a reduced level of risk, and this is something that the NHTSA would likely be unwilling to do.
“I believe NHTSA would resist ‘soft recall’ terminology because it implies a reduced level of customer hazard and allows the firm to be under less scrutiny by the press and public for quality corrections. While some updates are minor, some of the Tesla software upgrades are actually quite serious, and if not done, can allow a harmful defect to persist,” the recall specialist said.
But while the NHTSA’s stance on recall terminologies is completely understandable, one cannot deny the fact that the issues covered by vehicle recalls have a very wide range of risks. Take Tesla’s recall for 817,143 vehicles, which was announced earlier this month, for example. The recall was initiated since a software error may prevent a warning chime from activating even if drivers do not have their seat belts on. From a layman’s perspective, this recall seems grave as it affects over 800,000 Teslas on the road today. However, the issue was simply addressed through firmware release 2021.43.101.1 and later, which included a remedy for the seat belt chime error.
Compare this with General Motors’ recall last year of 400,000 pickup trucks in the US. Granted, it only affected about half as many vehicles as Tesla’s seat belt chime recall, but its hardware-based nature suggested that the risk presented by the issue was great. The recall covered certain 2015 and 2016 Chevrolet and GMC Sierra 1500, 2500, and 3500 trucks, and it involved a faulty airbag inflator that may rupture without warning. To fix the issue, owners of the affected trucks were required to head to a dealer so that they could get their airbag modules replaced. Since parts were in short supply last year, however, owners were notified with a letter to inform them when their trucks’ replacement parts were available.
What Can Be Done
While the NHTSA will likely continue to maintain the status quo with its recall terminologies for the foreseeable future, Professor Ball told Teslarati that the agency can actually implement some adjustments now that can make distinguishing safety fixes and issues clearer. This would likely be extremely important in the near future as more connected cars are rolled out and software updates become the norm.
“If I were to provide advice to the NHTSA, I would recommend that they get out ahead of this issue before every car maker starts updating cars like Tesla. One way to do it is to require the automaker to send all auto updates to NHTSA when pushed out, and to classify updates as ‘minor’ or ‘major.’ Any major update that impacts customer safety would be classified as a recall. Automakers won’t like this, but it will help keep the safety fixes transparent for all, especially consumers. By sending all updates to NHSTA, the agency could assign qualified people to audit the classifications assigned by the manufacturer, to ensure they are making good decisions there.
“I think any language that de-emphasizes the importance of a safety recall is not likely to be supported by NHTSA, and it doesn’t likely help customer safety. A clear distinction needs to be made between minor updates and major updates that influence safety. Those major updates should be classified as a recall, and NHTSA needs to get their arms around these updates and keep on top of them soon, or they will fall way behind the industry,” the recall specialist said.
Recalls can affect the perception of a company to the public. Software fixes should be one of the factors that are considered an edge for automakers like Tesla, not the other way around. Gary Black, Managing Partner of The Future Fund LLC, explained this from the point of view of a Tesla investor. “Since every NHTSA recall so far has been quickly solvable via Tesla OTA updates, ‘recalls’ are noise to most investors. Tesla’s huge software edge highlights one of the key advantages of owning Tesla over every other EV manufacturer,” the Wall Street veteran told Teslarati.
OTA updates, including those related to vehicle safety, are coming. With automakers like Ford joining the group of carmakers embracing OTA updates, software-based fixes are inevitable. Ultimately, I am inclined to agree with the recall specialist. By refusing to adapt to the advent of software-based vehicle fixes, the NHTSA may risk being left behind by the automotive industry. And that’s a scenario that I believe no automaker — or government agency for that matter — would prefer.
Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.
It is safe to say SpaceX won’t be going for electric rockets anytime soon.
In a characteristically blunt reply on X, SpaceX frontman Elon Musk stated, “Unfortunately, electric rockets are impossible,” following reports that MSCI had assigned SpaceX its lowest possible ESG rating of CCC.
The assessment, issued just this past week, coinciding closely with SpaceX’s public market debut, placed the company on par with nations like Russia in sustainability scoring and cited significant risks in environmental, social, and governance areas.
MSCI flagged SpaceX’s exposure to rocket emissions and other operational impacts, alongside governance concerns such as concentrated control by Musk and limited shareholder protections. Musk’s terse comment directly addressed the environmental pillar, underscoring a core physical constraint that ESG frameworks often overlook when evaluating high-thrust industries.
Unfortunately, electric rockets are impossible
— Elon Musk (@elonmusk) June 21, 2026
Electric propulsion systems do exist and are widely used in space. Ion thrusters and Hall-effect thrusters accelerate ionized propellant, typically xenon or krypton, using electric fields, achieving very high specific impulse, often exceeding 3,000 seconds compared to roughly 300–450 seconds for chemical rockets.
This efficiency makes them ideal for satellite station-keeping, orbit raising, and deep-space missions where low thrust over long durations is sufficient. SpaceX’s own Starlink satellites employ electric propulsion for these purposes.
However, launching from Earth’s surface demands something entirely different: enormous thrust delivered rapidly to overcome gravity and atmospheric drag. A typical orbital-class booster must generate thrust far exceeding its weight, often in the millions of Newtons within seconds.
Chemical rockets achieve this through exothermic combustion of dense propellants, producing high-mass-flow, high-velocity exhaust. Electric systems, by contrast, expel very small amounts of mass at extremely high speeds. Generating equivalent thrust would require impractical onboard power levels, massive energy storage or generation systems, and prohibitive added mass, rendering the approach infeasible with current or near-term technology.
Musk has previously expressed a similar sentiment, noting a desire for electric orbital rockets while acknowledging the inescapable requirements of Newton’s third law and energy delivery. The distinction is clear: electric propulsion excels once a vehicle is already in space; it cannot replace the high-thrust chemical phase required to reach orbit from the ground.
The episode illustrates broader critiques of ESG ratings. Proponents argue they incentivize better risk management and long-term sustainability. Detractors, including Musk—who has previously called ESG a “scam”—contend that such metrics can penalize essential activities when no practical alternative exists, potentially discouraging innovation in sectors like space access.
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SpaceX has sought to mitigate launch-related impacts through reusability: Falcon 9 boosters have flown more than 30 times in some cases, dramatically lowering the manufacturing and emissions burden per kilogram delivered to orbit. Starship’s design further emphasizes rapid reusability and methane propellant, which can theoretically be produced via sustainable pathways.
Ultimately, Musk’s remark serves as a reminder that certain engineering realities persist regardless of scoring systems. As humanity expands its presence in space for communications, science, and exploration, balancing genuine environmental progress with technological necessity remains a central challenge.
ESG frameworks may evolve, but the fundamental limits of electric launch propulsion are unlikely to change soon.
Tesla just trademarked ‘MEGAPOD’ with the United States Patent and Trademark Office (USPTO), its latest move in what seems to be a hint that the company is incredibly focused on its AI efforts and storage needs as compute increases.
The application carries serial number 99893717 and lists the applicant as Tesla, Inc., located at 1 Tesla Road, Austin, Texas 78725.
The filing remains in ‘live pending’ status, and it is a new application waiting for assignment to an examining attorney. It has not yet been published or registered.
Tesla just trademarked MEGAPOD
Summary:
“Modular data center hardware systems for artificial intelligence computing, comprised of computer servers, computer hardware for artificial intelligence processing, computer networking hardware, electrical power distribution units, and… pic.twitter.com/3l85DsKadl— Robin (@xdNiBoR) June 19, 2026
According to the official goods and services description in the application, Tesla describes ‘MEGAPOD’ as:
“Modular data center hardware systems for artificial intelligence computing, comprised of computer servers, computer hardware for artificial intelligence processing, computer networking hardware, electrical power distribution units, and cooling systems, sold as a unit; self-contained modular computing hardware systems for artificial intelligence workloads; integrated computer hardware platforms for artificial intelligence computing, namely, enclosures containing computer hardware, power distribution hardware, and cooling hardware, sold as a unit; downloadable software for monitoring, managing, optimizing, and regulating modular artificial intelligence computing hardware systems.”
This description specifies complete, self-contained modular units that integrate servers and specialized AI processing hardware with networking components, power distribution, and cooling systems. It also includes associated downloadable software for oversight and optimization of these systems. The language emphasizes hardware sold “as a unit” and enclosures that combine the necessary elements for AI computing workloads.
Tesla has an established history of developing and commercializing modular hardware systems. Its Megapack product line, for example, consists of utility-scale battery energy storage systems designed as containerized units for grid applications. The MEGAPOD filing follows a similar pattern of protecting a name for modular, integrated hardware platforms, this time focused on artificial intelligence computing infrastructure.
This could be an early move, especially as Tesla did not have trademark rights to the word ‘Cybercab,’ the name of its self-driving, ride-hailing-focused vehicle.
Trademark applications of this type allow companies to secure priority rights to a name for defined categories of goods and services. The USPTO examines applications for compliance with legal requirements, including distinctiveness and absence of conflicts with prior marks. If the application proceeds successfully through examination, publication, and any opposition period, it could result in a federal trademark registration providing nationwide protection. This is what Tesla’s obvious intention is with ‘MEGAPOD.’
Public reports and analysis suggest MEGAPOD could represent modular, container-style AI computing pods designed for easy deployment. These would bundle servers, AI accelerators, power systems, and cooling into self-contained units suitable for distributed AI workloads. This approach aligns with Tesla’s announced AI compute strategy.
In March 2026, Elon Musk outlined plans for “Digital Optimus” (also referred to as Macrohard), a joint Tesla-xAI project for AI agents capable of handling complex digital tasks. The plans include running these agents on Tesla’s AI4 hardware in parked vehicles as well as dedicated compute units installed at Supercharger stations, which collectively offer substantial unused electrical capacity.
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A modular hardware platform like the one described in the ‘MEGAPOD’ filing would support scalable, rapid deployment of such distributed compute resources. It could complement Tesla’s other AI infrastructure efforts, including the Dojo supercomputer used for training models and the development of AI systems for autonomous driving and robotics, by enabling edge or regional AI inference without reliance on traditional centralized data centers.
Investor's Corner
SpaceX is launching a secret spacecraft that could change how things are made in space
SpaceX’s secret disk-shaped Starfall capsule is targeting a market no reentry vehicle has cracked.
SpaceX is targeting Tuesday, June 23 for the first flight of Starfall, a reentry capsule the company has developed almost entirely in private. The Falcon 9 launch window opens at 6:43 a.m. ET from Space Launch Complex 40 at Cape Canaveral Space Force Station, with a backup window available the same time on June 24. SpaceX has made no public announcement about the vehicle, only providing launch details. Everything known about it has come through FAA and FCC regulatory filings.
What makes Starfall different starts with its shape. Rather than the traditional cone used by Dragon and every other cargo return capsule in operation, Starfall is a flat disk that measures roughly 10.2 feet (3.1 meters) wide and just 2.5 feet (0.75 meters) tall, and weighing 4,630 pounds (2,100 kg) and capable of returning up to 2,200 pounds (1,000 kilograms) of payload from orbit. The disk geometry maximizes structural efficiency and payload volume relative to mass, and the heat shield mechanically jettisons just before splashdown, allowing recovery teams to retrieve both the capsule and the shield separately from the Pacific Ocean.
The difference with Starfall from existing competitors, such as Varda Space Industries, which has largely built the orbital manufacturing market and returns heavy payloads per flight is that Starfall’s specification is roughly 30 times more per mission, and is designed to be mass-produced and launched on either Falcon 9 or Starship. That combination of volume and launch access is something no standalone startup can replicate, and it puts SpaceX in direct competition with the companies that currently pay it to reach orbit.
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The intended market is orbital manufacturing: pharmaceuticals, protein crystals, semiconductors, and advanced optical fiber that physically cannot be produced in the presence of gravity. FAA documents describe Starfall’s long-term purpose as building a “self-sustaining commercial in-space manufacturing market” and as a potential successor to the industrial capabilities of the International Space Station, which is set to retire in the late 2020s. Military rapid global cargo delivery is a parallel application under active discussion with the Pentagon.
The reason some industries seek manufacturing in space comes down to gravity. On Earth, gravity causes materials to settle, separate, and deform during production. In microgravity, those constraints disappear.
SpaceX’s already controls launch access, which means it currently functions as the landlord for every competitor in the orbital manufacturing return space. Starfall converts that landlord position into vertical ownership, and it would no longer just carry other companies’ capsules to orbit, but rather operate the capsule, own the return logistics, and capture the service revenue directly. Viewed alongside Starlink, Colossus, and the xAI merger, Starfall fits a consistent pattern: SpaceX identifying infrastructure layers that others depend on and moving to own them outright. Orbital manufacturing return is the next layer on that list.
If Tuesday’s reentry, parachute sequence, and recovery demonstration goes as planned, the second FAA-approved test flight follows. A successful pair of demos would position SpaceX to begin offering Starfall as a commercial service, likely first to pharmaceutical and materials science customers before scaling toward the military and broader manufacturing segments.
Elon Musk responds to SpaceX’s ESG rating and says its rockets won’t go electric
Tesla just trademarked MEGAPOD: here’s what it is
