Tesla’s stock (TSLA) is down 7% this week, wiping out tens of billions of dollars worth of market capitalization.
The market is trying to figure out what is putting so much pressure on the stock.
The main suspect is the NHTSA probe into Tesla Autopilot in relation to accidents with emergency vehicles where the driver-assist system was believed to be activated.
The news that the federal agency is looking into the matter has been all over the news, and coincidently or not, Tesla stock fell by as much as 5% yesterday.
Today, it has been down by as much as 4%.
The automaker has lost around $50 billion worth of market capitalization since the news came out.
However, the broader market has also been down this week.
Today, the S&P 500, Dow, and Nasdaq are all down more than 1%. There are a lot of geopolitical factors at play, especially the situation in Afghanistan and also signs of a slower economic recovery in China.
What do you think is happening?
Personally, I think it is more about Tesla falling to the pressure of the broader market pulling back.
I am aware that 7% is a lot more than 1%, but Tesla’s stock is a lot more volatile, and it goes both ways.
As for the NTHSA probe, this is the fourth or the fifth probe that they have done on Tesla-related accidents, and they rarely result in anything significant.
In my opinion, the most important thing that NHTSA did with Tesla is forcing them to finally fix the MCU issue, but that has nothing to do with crashes.
Investigations into Autopilot most often find that the drivers weren’t paying attention.
The only thing that I could see happening is that NHTSA finds that Autopilot makes people more likely to pay less attention on the road, but that would be hard to prove.
I have personally used Autopilot on the highway for over 10,000 miles, and I think it improves my safety.
It takes over some of the driving tasks and enables me to focus more on the road.
However, I can definitely see how someone could grow complacent and pay less attention.
Over the year, Tesla could certainly have done more on the driver monitoring front, but they have been releasing more driver monitoring features recently.