Tesla stock drops on news that NTSB is investigating fatal crash of Model X in Northern California
The National Transportation Safety Board is sending two investigators to examine issues raised by the fatal crash of a Tesla vehicle in Northern California. Tesla Inc. stock dropped more than 8% on the news.
The Tesla vehicle struck a highway barrier Friday near Mountain View and caught fire, closing freeway lanes for hours as firefighters tried to determine whether it was safe to move the vehicle and its damaged lithium-ion battery packs, according to the San Jose Mercury News.
The safety board will examine the post-crash fire and steps needed to make the vehicle safe to remove from the scene, the agency said Tuesday on Twitter. It’s unclear whether the Tesla’s partially autonomous driving system, known as Autopilot, was engaged at the time of the crash, the NTSB said.
According to the Mercury News, the vehicle was a Tesla Model X SUV, and its driver — 38-year-old Wei Huang of San Mateo — died in a hospital the day of the crash.
“We have been deeply saddened by this accident, and we have offered our full cooperation to authorities as we work to establish the facts of the incident,” Tesla said in an emailed statement.
Tesla shares closed down 8.2% at $279.18. Since Feb. 26, Tesla stock is down about 22%, while the Nasdaq market, where Tesla trades, has declined about 6%.
Moody’s Investors Service downgraded Tesla’s corporate family bond rating to B3, six levels into junk, and said its outlook on the company is negative. Moody’s cited “the significant shortfall” in production of Tesla’s crucial new Model 3 electric sedan, and questioned whether it had adequate capital to cover its operations.
Tesla’s stock is under pressure “on the growing assumption that Tesla will miss another milestone on Model 3 production,” Efraim Levy, an analyst at CFRA Research, said. Tesla Chief Executive Elon Musk had forecast a weekly production rate of 2,500 for the Model 3 by the end of this week.
Bloomberg’s Model 3 tracker estimates the company may be making about 975 of the cars a week, well short of Musk’s goal. An analyst at Citigroup Inc. wrote Tuesday that Tesla may be struggling to convert car shoppers into Model 3 buyers.
Tesla is expected to reveal production figures next week.
“This is the most negative I’ve seen sentiment in a while,” Ben Kallo, an analyst at Robert W. Baird & Co., said Tuesday. “It’s really about the Model 3 production and ramp up, and the shorts [short sellers] are piling in.”
A crash in Arizona last week in which an Uber-operated driverless car killed a pedestrian added to investor concern about autonomous driving, Levy said. Uber, Toyota and chipmaker Nvidia announced they were suspending driverless testing. On Monday, Arizona Gov. Doug Ducey officially ordered Uber’s driverless car and trucks off the road.
Tesla plans to introduce a new version of its Autopilot self-driving software later this year.
The investigation is the second this year involving Tesla by the NTSB, which opens only a handful of highway cases each year. The agency also is examining a Jan. 22 crash in Los Angeles in which a Tesla Model S rammed into the rear of a firetruck parked on a freeway. In that case, the driver told authorities that the vehicle was operating under Autopilot.
Last September, the NTSB concluded that Tesla’s Autopilot was a contributing factor in a fatal crash in Florida in 2016. The driver of that car had been using the car’s automatic steering function for a prolonged period and didn’t stop when a semi-truck made a left turn in front of him.
Times staff writer Russ Mitchell contributed to this report.
UPDATES:
3:45 p.m.: This article has been updated with Moody’s bond downgrade.
1:15 p.m.: This article has been updated with a closing stock price, Model 3 production data and analyst commentary.
12:15 p.m.: This article was updated with Tesla’s stock movement.
This article was originally published at 10:15 a.m.
