It is reported that an unlocked engine hood can completely open and block the driver's line of sight, increasing the risk of collision. On the eve of this bearish news, Tesla's stock price rebounded over 5% on Monday under the bullish sentiment.

Tesla has already started releasing airborne software updates that detect whether the electric vehicles' engine hoods of all types can respond to being opened and send notifications to customers, according to the latest NHTSA statement.

US regulators said Tesla's massive recall applies to certain 2021-2024 Model 3, Model S, Model X and 2020-2024 Model Y vehicles. Tesla said these vehicles are all equipped with engine hood locks produced by Magna Closures Co Ltd in China.

This electric vehicle leader stated that since March, the company has been investigating customer complaints about accidental engine hood openings on some Model 3 and Model Y vehicles in China, and launched a recall for lock hardware and a comprehensive inspection of vehicles in use.

Although such incidents in Europe and North America are relatively rare, Tesla said it began engineering studies last month in Europe and North America to inspect engine hood lock components and decided earlier this month to issue a potential recall notice.

Tesla recalled over 0.011 million Cybertrucks in the United States in June due to some minor details with their windshield wipers and exterior decor.

This recall is the largest since Tesla announced last December that it would recall up to 2.03 million electric vehicles in the United States, covering almost all Tesla vehicles on US roads at the time, mainly to install new security measures in the Tesla Autopilot system.

However, after receiving 20 accident reports involving updated Autopilot electric vehicles, the United States National Highway Traffic Safety Administration (NHTSA) has launched an investigation, saying it has found "several issues" related to the recall.

Morgan Stanley has listed Tesla as its top pick among auto stocks and reiterated a target price of up to $310.

Tesla posted its worst quarterly profit margin in over five years last week, highlighting the difficulty of addressing slowing demand for electric vehicles in a high-interest-rate macroeconomic environment.

Wall Street bank Morgan Stanley has replaced Ford with Tesla as its preferred auto stock in the US automotive industry, and believes that Tesla's share price still has potential to rise by up to 40%, reiterating a "buy" rating and a target price of up to $310. Under this news boost, Tesla's stock price fully reversed last week's decline of 8% to $219.80 on Monday, rising 5.6% overnight.

Morgan Stanley analysts pointed out that Tesla, which is in an absolute leadership position in electric vehicles, is actively transferring resources, technology, talent and capital from the electric vehicle manufacturing industry to other emerging technology development areas. Meanwhile, Morgan Stanley analysts observed that Ford talked about electric vehicles more during the second quarter earnings call than Tesla did, which may reflect the rising industry-wide attention to electric vehicles, with Tesla already in a leading position.

Morgan Stanley said that Tesla, as a global leader in electric vehicle manufacturing, has made significant progress in sales growth, product innovation, production capacity expansion and charging network construction in recent years, strengthening its competitive advantages in the industry.

In their report, analysts at Daiwa mentioned that the commercial opportunities for artificial intelligence in non-automotive industries may be greater than that of autonomous driving cars and have a faster application speed. They believe that the commercial potential of Tesla's humanoid robots may even surpass that of autonomous driving cars and attract more capital investment.