Entertainment

Why did Tesla shares fall again today?

What happened

Electric car company shares Tesla (TSLA) -3.87%) drove into a ditch on Friday, down 3.5% at 11:20 a.m. ET. And yes, the entire stock market is down today: spooked by a government report that inflation just hit a 41-year high, the Nasdaq Tesla trades on is down almost as much as Tesla itself: 3.2%.

But Tesla has its own problems.

Specifically, the National Highway Traffic Safety Administration (NHTSA) announced Thursday that it is expanding its investigation into a series of accidents in which Tesla electric cars, operating on their autopilot function , collided with police cars and other first aid vehicles stopped on the side. of the road

And that

Some 830,000 Tesla Model S, 3, X and Y vehicles made between 2014 and 2021 are subject to investigation and possible recall, according to reports. The Wall Street Journal. The recall itself shouldn’t be a big deal for Tesla; even if it does happen, the issue being investigated relates to Tesla software which could, at least in theory, simply be disabled via an over-the-air update.

Of greater concern is the damage to Tesla’s reputation if the NHTSA determines that Autopilot is defective and should not be used. Should that happen, Tesla will not be able to sell the Autopilot feature in its vehicles until a fix is ​​discovered, which could cost Tesla a subscription software revenue stream worth up to $199 per month. …multiplied by 830,000 cars… equals $2 billion per month. year in potential income.

Now what

And the bad news doesn’t even end there. Remember how last week, Tesla spooked investors with reports that the company might be laying off 10% of its workforce (later revised to reports that it was laying off just 10% of its salaried office workers)? Well, today, Reuters is reporting that Tesla has started canceling recruitment events to hire workers in China, its biggest electric car market in the world.

Of course, this latest news could turn out to be as much of an exaggeration as the reports of office worker layoffs were, but between the potential layoffs, slowing Chinese recruiting, and earlier reports that Tesla may be making stealth layoffs by changing his work. -from home, the evidence seems to suggest that Tesla is seeing a slowdown in demand and is adjusting his payroll to compensate.

Investors betting on Tesla continuing to grow at the rate it has been growing in recent years could be in for a nasty surprise.

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button