The U.S. National Highway Traffic Safety Administration (NHTSA) is investigating Tesla’s Full Self-Driving (FSD) system, affecting approximately 2.88 million vehicles. This scrutiny comes after numerous reports of traffic violations linked to the advanced driving technology, leading to heightened attention from both regulators and investors.
NHTSA Investigation Details
The NHTSA’s inquiry follows over 50 reports of safety-related issues and several incidents involving Tesla’s FSD system. Key points from the investigation include:
- 58 reports of traffic safety concerns
- 14 crashes reported
- 23 injuries associated with FSD-related incidents
Notable issues highlighted in the investigation include Tesla vehicles allegedly running red lights and changing lanes incorrectly. This investigation also takes place during a period of increasing scrutiny from Congress, especially after the appointment of a new NHTSA administrator.
Tesla’s Previous Investigations
Tesla has faced multiple probes in the past regarding its FSD technology. In September, for example, a preliminary investigation into the Model Y focused on issues with the electronic door handles, which were reportedly trapping children inside the vehicles.
Implications for Investors
The ongoing NHTSA investigation raises regulatory risks for Tesla (TSLA) investors and may introduce volatility in the stock price. While the company has experienced a significant stock rebound of over 70% in the past six months, concerns about safety and potential recalls weigh heavily on market sentiment.
- Current consensus rating for TSLA: Hold
- Recent analyst activity: 15 Buys, 13 Holds, 9 Sells
- Average price target: $363.60 (indicating a 16% potential downside)
As Tesla pushes forward with its electric vehicle (EV) strategy, the scrutiny faced in relation to its FSD system may affect investor confidence. Close monitoring of updates from the NHTSA and Tesla’s responses will be crucial for those looking to navigate potential market shifts.
