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Tesla Stock Drops as NTSB Investigates Model X Fatal Crash

Tesla stock dropped after the announcement of the National Transportation Safety Board (NTSB) that it is conducting a field investigation involving a Model X fatal crash last week.

Tesla stock fell more than 8.2% to close at $279.18 on Tuesday’s trading session. Its stock further slid 1.75% to $274.30 in the after-hours session.

In the last month, Tesla stock price has gone down 20.5%.

The NTSB tweeted that 2 investigators were conducting field research into the March 23 accident. The officials said it remained “unclear if automated control system was active at time of crash,” referring to Tesla’s autopilot system.

The Tesla vehicle struck a highway barrier Friday near Mountain View and caught fire, closing freeway lanes for hours. Firefighters struggled to determine whether it was safe to move the vehicle and its damaged lithium-ion battery packs, reported the San Jose Mercury News.

A model X parked in front of a Tesla dealership
Tesla stock dropped 8% on news about NTSB’s investigation about a fatal crash last week.

Emergency officials consulted company engineers before determining how to extinguish the fire and move the vehicle safely.

Additionally, the accident involved 2 other cars, the NTSB and police said.

The California Highway Patrol said the Tesla vehicle crashed into a freeway divider on Friday. Then it was hit by a Mazda before colliding with an Audi.

The vehicle was a Tesla Model X SUV, and its driver was 38-year-old Wei Huang of San Mateo. He died in a hospital the day of the crash.

“We have been deeply saddened by this accident, and we have offered our full cooperation to authorities as we work to establish the facts of the incident,” Tesla said in an email.

Tesla said that it does “not yet know what happened in the moments leading up to the crash.”

Further, added data shows that Tesla owners have driven the same stretch of highway with Autopilot engaged “roughly 85,000 times… and there has never been an accident that we know of.”

The company said it is working with authorities to recover the logs from the computer inside the vehicle. This is to try to gain a better understanding of what happened.

Safety surrounding self-driving cars has been under scrutiny since last week’s death of an Arizona pedestrian who was killed by an Uber car in self-driving mode. On Monday, the Arizona governor suspended testing of autonomous cars in the state.

On Tuesday, chipmaker Nvidia also said it was suspending tests of self-driving cars worldwide

Bears on Tesla Stock

Citi analysts said their research concluded Model 3 competition is heating up and could indicate near-term risk for shares, according to CNBC.

John Thompson, CEO of Vilas Capital Management, said on MarketWatch that Tesla will be bankrupt within 4 months unless Elon Musk “pulls a rabbit out of his hat.”

“Companies eventually have to make a profit, and I don’t ever see that happening here,” Thompson said. “This one of the worst income statements I’ve ever seen and between the story and the financials, the financials will win out in this case.”

Similarly, Moody’s downgraded Tesla’s rating Tuesday, and assigned it a negative outlook, thanks to the shortfall in the production rate of the Model 3.



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