The National Highway Traffic Safety Administration announced Friday it has opened a preliminary investigation into Tesla's Full Self-Driving, or FSD, technology in more than 2 million vehicles amid reports of four collisions, including one fatal accident, that appear to involve the autonomous driving feature in reduced visibility conditions.
The regulators said Friday the investigation will cover 2.4 million Tesla vehicles and will look at how FSD technology detects and responds to low visibility conditions. In December 2024, Tesla performed an over-the-air software "recall" on more than 2 million vehicles after federal regulators determined Tesla's Autopilot system is prone to misuse after reviewing 1,000 accidents.
The latest probe by federal investigators into Tesla's autonomous driving comes just days after Tesla and Chief Executive Elon Musk unveiled the robotaxi and robovan, making a big bet on completely autonomous vehicles.
Musk at the robotaxi event a week ago said he expects "fully autonomous unsupervised FSD in California and Texas next year — that's with the Model 3 and Model Y." However, he admitted, "I tend to be a little optimistic with time frames."
Musk has said for years that Tesla would achieve totally autonomous self-driving "this year" or "next year," while production targets often slip considerably. He also didn't offer new evidence that Tesla FSD was making progress toward actual self-driving.
Meanwhile, Tesla has not yet received regulatory approval from China authorities to launch FSD functions in the country, according to a China Daily report Friday. Tesla said last month it expected to launch FSD in China in the first quarter of 2025.
Shares of TSLA edged down a fraction to 220.77 during market action on Friday after edging down 0.2% on Thursday. Going into Friday, Tesla stock was up 1.4% on the week.
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Tesla Stock Performance
October has been a big month for Tesla — with third-quarter vehicle deliveries at the beginning of the month, the robotaxi event last week and Q3 earnings coming on Oct. 23. However, so far there has not been a catalyst sending Tesla stock higher. Tesla stock is down 15.6% this month as of Oct. 17.
Last week, Tesla stock dived 12.9% to 217.81, its worst weekly loss since April, capped by the 8.8% tumble on Oct. 11, falling decisively below its 50-day moving average in heavy volume.
Tesla Robotaxi Event: Cybercab, Robovan Unveiled; Musk Sees Self-Driving 'Next Year'
Friday's sell-off followed the much-hyped Tesla robotaxi event. Chief Executive Elon Musk showed off the Cybercab along with the Robovan and once again predicted fully autonomous Tesla vehicles will hit the roads next year. However, analysts broadly were disappointed with the lack of details or specifics from the Tesla head.
Tesla also didn't show off an "affordable" model, a still-unseen EV that's supposed to start production in early 2025. That, along with a refreshed Model Y, is key to Tesla boosting or at least maintaining delivery levels next year.
Tesla stock is in a cup-with-handle base with a traditional 264.86 buy point, according to MarketSurge charts.
Tesla reports third-quarter earnings and revenue on Oct. 23 with analyst consensus predicting quarterly profit falling around 9%. Meanwhile, Tesla sales are expected to increase about 9% in Q3, according to FactSet.
Investors will be looking for hints about the still-unseen "affordable" vehicle as well any details about the long-awaited Model Y refresh.
Tesla stock ranks third in the 35-member IBD Auto Manufacturers industry group. The stock has a 49 Composite Rating out of a best-possible 99. Shares also have a 46 Relative Strength Rating and a 57 EPS Rating.
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