Tesla Stock Down as US Agency Opens Formal Probe into Tesla Autopilot System

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by Benjamin Godfrey · 3 min read
Tesla Stock Down as US Agency Opens Formal Probe into Tesla Autopilot System
Photo: Unsplash

The United States National Highway Traffic Safety Administration (NHTSA) has opened a probe into electric vehicle manufacturer Tesla in relation to its autopilot system.

As reported by CNBC, the probe is centered on the fact that Tesla Inc (NASDAQ: TSLA) vehicles on self driving systems typically have trouble spotting parked emergency vehicles.

Since 2018 to date, the government-backed agency said it has recorded a total number of 11 crashes involving Tesla vehicles on autopilot or the Traffic Aware Cruise Control. These vehicles are not only crashing into emergency vehicles flashing lights, they have also been known to run into roadside flares, an illuminated arrow board or cones warning of hazards.

The driver-assist system helps a lot of drivers to stay on their lane while driving. The cars on autopilot notably maintain a safe distance from the vehicles ahead, albeit, this has not helped stem the rate of crashes experienced in the past years. According to the NHTSA, as much as 25 out of the 31 crashes involving cars with driverless systems were owned by Tesla. A part of the cause of the crash occurs when the driver refuses to intervene occasionally as specified by Tesla and other automakers.

The probe involves about 765,000 Tesla vehicles, including Model Y, Model X, Model S and Model 3 vehicles. While the probe is still in its infancy, a potential recall may be underway, and will likely result in a huge setback for the Palo Alto-based firm. Tesla shares are reacting negatively to the probe news as the stock opened to a 1.57% drop in the Pre-market to $705.88. Tesla has pared off most of its gains, up 1.6% in 2021, as against the S&P 500 (INDEXSP: .INX) which has gained 19% year-to-date.

Is the Tesla Probe a Setback to the Company’s Growth Push?

The Elon Musk-led company is not new to government probes, and related legal tussles involving both the firm and its Chief Executive Officer. There have been reports to the NHTSA about Tesla’s car performances in the past. As reported by Coinspeaker back in January 2020, a total of 127 complaints were filed with the transport authorities about Tesla cars accelerating without being fired.

The filings as of then alleged that about 110 crashes and 52 injuries were recorded. Despite this track records of bad car performances, Tesla has largely maintained its lead as the world’s most valuable auto brand. While the negative implications of the recent NHTSA probe can’t be ruled out, it is unlikely that Tesla shares will plunge excessively based on this.

The company has found a way to turn its woes into strengths, and in a bid to develop its self-driving system product, flaws in the autopilot system will help the firm to bolster its systems to a more efficient system. This event is poised to boost Tesla’s growth in the long run.

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Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.

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