Tesla [NASDAQ:TSLA] shares have dropped 9% since opening this week — currently trading at US $279.18, down from $307.25 Friday 23 March.
Tesla’s share price has fallen a total of 22% over the past month.
Why the Tesla share price decline?
The current drop is due to an investigation by The National Transportation Safety Board into a fatal crash involving a Tesla vehicle.
It is yet to be confirmed if Tesla’s self-driving feature was switched on at the time of the crash.
As reported by CNBC, the NTSB posted on Twitter saying,
‘2 NTSB investigators conducting Field Investigation for fatal March 23, 2018, crash of a Tesla near Mountain View, CA. Unclear if automated control system was active at time of crash. Issues examined include: post-crash fire, steps to make vehicle safe for removal from scene.’
According to the LA Times, the investigation was sparked as concerns were raised — after the Tesla vehicle caught fire after hitting a highway barrier — as to whether it was safe to move the vehicle. Lithium-ion battery packs, which Teslas are full of, have been known to combust and/or explode when extremely damaged.
To compound investors’ concerns about autonomous driving, last week in Arizona an incident involving an Uber-operated Toyota driverless car killed a pedestrian.
What’s next for Tesla?
This is not the first investigation by the NTSB concerning Tesla. The LA Times revealed that they are currently examining an incident from January this year involving a Tesla vehicle and its autonomous driving system.
Despite the poor publicity, Tesla plans to introduce an updated version later this year of it Autopilot self-driving software.
In the past, Tesla has weathered concerns about its sky-high share price. Investment industry analysts often wonder why the stock maintains a valuation twice that of Ford, for example. That’s despite Ford making a US$7.6 billion profit last year making 6 million cars, while Tesla lost US$2 billion making 100,000 cars. However, CEO Elon Musk has always dismissed such concerns, often through his charismatic social media presence. This may help explain why the share price has continued to rise so defiantly for so long.
With this rise in safety concerns, that no longer seems to be the case. In order for Tesla to win back investors’ confidence in autonomous driving systems, it’s going to take a little more than just a few tweets.
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