The good news first… Tesla Motors Inc stock has remained mostly unchanged today after reports of the NHTSA investigation. Still, Tesla and its CEO – Elon Musk – had a rough June, and the end of the month was no better. Late Thursday, the authorities revealed that Tesla’s autopilot feature is linked to a death in Florida.
June – a rough month for Tesla
A series of issues dented Tesla’s winning streak with investors and public in June, says a report from the Wall Street Journal.
The NHTSA revealed earlier in June that it was looking into a separate suspension issue with the Model S electric sedan. It further chastised the EV maker for having consumers sign nondisclosure agreements that could discourage them from reporting any possible safety problems in exchange for covering some costs of repair. The EV firm revised the agreements, but only after a swarm of publicity.
Last week, Musk proposed Tesla should acquire SolarCity in an all-stock deal valued at up to $2.8bn. Many opposed the deal as Musk is the largest shareholder and the chairman of the solar company. Some analysts questioned the rationale of the merger, and other analysts cut their price targets.
Last week, after the announcement of the proposed acquisition of SolarCity, Tesla’s shares dropped 12%, but it made up much of that ground in recent days. The stock is down 11.5% so far this year. However, in comparison to the potential fallout from the autopilot investigation, those setbacks could pale.
A death tied to an autonomous car could spark a huge backlash, and question the safety and viability of the technology. Now, the EV maker risks being the test case that could prompt new safety laws or regulations limiting the roll-out of automated-driving tech, says the WSJ.
Tesla Motors Inc , in a statement, underlined the steps it has taken to collaborate with NHTSA on its efforts to find out the factors that caused the crash. Also, it mentioned that it was the first fatality in more than 130 million miles with autopilot on.
An easy target
Tesla Motors Inc represents both the self-driving future and the electrification of the auto industry. Thus, it has become the target for politicians and critics who oppose tax breaks for electric vehicles.
During its short history, the automaker has made a habit of pushing the boundaries of what both regulators and consumers will accept in terms of new tech. Last year, the autopilot feature was distributed to the Model S owners as a software download – no other automaker had done that before.
Earlier in the year, there were questions about its ability to up the production to meet the demand of its less expensive Model 3 electric sedan – due in 2017. Even Model X faced series of quality issues. For example, the attractive falcon wing doors of the electric car encountered serious glitches.