Tesla stock slides amid investigation into deadly crash

2014 BMW i3 REx vs Chevrolet Volt comparison

2014 BMW i3 REx vs Chevrolet Volt comparison

This rocky blow follows the National Transportation Safety Board (NTSB) setting loose an investigation of last week's fatal Highway 101 accident involving a Model X. The NTSB seeks to determine if the electric vehicle giant's automated control system was responsible, where a collision resulted in the driver's auto catching fire- a kind of investigation that usually takes a year to a year and a half to conclude.

Tesla said it can't confirm whether the vehicle was in autopilot mode at the time of the crash because it hasn't been able to retrieve logs from the auto.

Tesla declined as much as 6.6 per cent to US$260.89 Wednesday, the lowest in a year. Local reports indicated that the road was closed for six hours after the crash because the local fire brigade was unsure if the car's battery would explode.

Even though the company was able to rake in $3.29 billion past year, analysts believe that sum is not enough to keep Tesla afloat.

"It's getting worse and worse every single day" for Tesla, said Bill Zox, chief investment officer of fixed income at Diamond Hill Investment Group. NTSB said the issues being examined include the post-crash fire and removing the vehicle from the scene.

News of the federal agency's involvement had an immediate impact on TSLA stock, which rapidly began dropping.

The Tesla Model X struck a barrier, flipped into ongoing traffic and was hit by two oncoming vehicles, the California Highway Patrol said on Friday. "And there has never been an accident that we know of", according to the Tesla blog. Earlier this week, Tesla proactively reached out to the authorities to offer our assistance in investigating.

In January, the NTSB and the National Highway Traffic Safety Administration dispatched teams to Culver City, near Los Angeles, to investigate the crash of a Model S electric vehicle that may have been operating under the Autopilot system.

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Tesla added that the crash was so severe because a highway safety barrier had either been removed or crushed in a prior accident without being replaced. It also noted that witnesses say the driver had been extracted before the fire "could have presented a risk".

Tesla rolled out the Autopilot function in 2015.

Last week's fatal accident involving an Uber test vehicle in self-driving mode has thrown the entire autonomous vehicle industry into turmoil. It also claims that the Model X "is the safest SUV ever".

Tesla's Autopilot team has suffered from leadership turnover over the past year and a half.

The downgrade comes as Tesla has been grappling with "production hell" for its Model 3 vehicle. While the company has said it expects to end the quarter making 2,500 Model 3s per week, analysts are skeptical. Finally, Vetr raised Tesla from a "buy" rating to a "strong-buy" rating and set a $354.98 target price for the company in a research report on Monday, March 19th.

At this point, Bloomberg estimates that Model 3 production difficulties have the total output since July at roughly 11,350 cars, with a current production rate of just over 1,000 units per week.

Tesla provided some context about the crash in a Tuesday blog post after the NTSB made its announcement.

Shedding almost $20 billion in market capitalization since shares of Tesla crest $389.61 a share on September 18, 2017, the Silicon Valley-based electric carmaker could be facing a cash flow crunch as investors continue to remove their bets from the table.

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