Tesla Falls As NTSB Head Calls FSD ‘Misleading And Irresponsible’

Tesla (TSLA) plans to roll out the next version of what it calls its full self-driving software on Friday, but a federal traffic safety agency thinks the EV maker should hit the brakes. TSLA stock gapped down amid a market sell-off, with rival automakers also falling solidly.


Tesla CEO Elon Musk pledged in a tweet on Sept. 16 to open the next version of its FSD software, Beta 10.1, broadly to FSD owners and subscribers “if driving behavior is good for 7 days.”

Musk claims Tesla’s advanced driver-assistance features prevent crashes and make driving safer. Even if sometimes he admits that the system still needs improvement, Musk mostly plays up the positive.

For example, on Sept. 17 he tweeted: “2000 beta users operating for almost a year with no accidents. Needs to stay that way.”

But the new head of the National Transportation Safety Board thinks otherwise. Jennifer Homendy told the Wall Street Journal, that Tesla should not roll out the city-driving tool until it addresses safety deficiencies in its technology.

Homendy called Tesla’s use of the term FSD “misleading and irresponsible.”

She also seemed call out Musk’s tactics in promoting FSD. She told the WSJ that people pay more attention to marketing than to warnings in car manuals or on a company website.

Tesla Crash Investigation

The NTSB investigates crashes, but has no authority to regulate automakers. That lies with the National Highway Transportation Safety Administration.

Still, Homendy’s comments come after the NHTSA opened a probe into Tesla’s Autopilot system.

The NHTSA said in an Aug. 13 document it was looking into 11 crashes since 2018 — later amended to 12 crashes — in which Tesla models of various configurations have “encountered first responder scenes and subsequently struck one or more vehicles involved with those scenes.”

The new probe appears to be more aggressive than prior NHTSA investigations involving Tesla. It includes sweeping data requests from Tesla and other automakers, while emphasizing how human drivers interact with Autopilot.

Tesla deployed Autopilot in 2015. It was designed to help drivers with steering and adjust to traffic flow on the highway. The goal is to eventually allow vehicles to operate autonomously. Right now, Tesla says both AP and FSD are Level 2. Industry standards classify autonomous driving beginning at Level 4. Several automakers and self-driving startups are testing Level 4 systems, with or without trained safety drivers.

Tesla’s new city-driving tool in its 10.1 software release is part of its FSD package. Tesla sells the suite for $10,000 or a monthly subscription that can cost up to $199. FSD currently includes tools that help vehicles change lanes on highways and slow down at stop signs.

Tesla Stock

Shares gapped down 3.9% to 730.17 the stock market today. Tesla stock closed just above an aggressive 730 buy point after sinking to 718.63 intraday, according to MarketSmith chart analysis. The buy range extends to 766.50.

But investors may want to focus on a new, official buy point of 764.55. TSLA stock now has a legitimate handle for its consolidation going back nearly eight months.

Tesla stock hit a record 900.40 on Jan. 25, capping a massive run.

“There have been a host of issues putting a ceiling on Tesla’s stock this year including: China PR/safety issues, FSD regulatory concerns, rising EV competition, and the lingering chip shortage among other issues, said Wedbush analyst Daniel Ives in a note to clients Sept. 16.

That said, Ives maintains his $1,000 price target for TSLA stock, among the highest on Wall Street, and outperform rating.

Tesla stock’s relative strength line ticked lower, after rising for several weeks. Its RS Rating is 84 out of 99, while its EPS Rating is 72.

Among U.S.-based automakers with a growing focus on EVs, General Motors (GM) tumbled 3.8% and Ford (F) dropped 5.3%. GM said Monday that it will replace batteries in some of the Chevy Bolt EVs recalled recently due to fire risk.

Recent IPO Lucid Motors (LCID) rose 4.8% after soaring 15% last week as Lucid Air deliveries near.

Tesla’s China-based rivals Nio (NIO) slumped 6.2%, while Xpeng (XPEV) retreated 6.2% and Li Auto (LI) 7.5%.

Li Auto cut its Q3 delivery target Monday, citing chip shortages.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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