Tesla Faces Federal Investigation Over Last Week's Fatal Crash

Tesla Faces Federal Investigation Over Last Week's Fatal Crash

Tesla says that it hasn't been able to retrieve the vehicle's logs due to extensive damage to the vehicle.

In last week's accident, it was unclear if Tesla's automated control system was driving the auto, Reuters said. The stock revealed activity of -10.10% for the past five days. The trend continued Wednesday with a decline of as much as 9.7 per cent, the biggest drop since June 2016, to $252.10. The problem for Tesla is it aggressively cultivates an online presence to promote the company and its products.

The prospect of negative publicity of the NTSB Model X crash probe is bad news for Tesla, but there are other worries for TSLA investors.

The downgrade comes as Tesla has been grappling with "production hell" for its Model 3 vehicle.

The federal agency doesn't normally investigate fatal vehicle accidents, but because Tesla has an autopilot feature, it is drawing heightened scrutiny. "We understand there were no occupants still in the Model X by the time the fire could have presented a risk", Tesla claims. That news sent Tesla stock spiraling down almost 5%.

The California Highway Patrol said the electric Model X crashed into a freeway divider on Friday and then was hit by a Mazda before colliding with an Audi. The driver's LinkedIn profile identifies him as a software engineer who joined Apple Inc.in November after more than a decade at Electronic Arts Inc.

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At its core, the comments question whether Tesla's basic business plan is so flawed that it threatens the company's ability to be successful at all.

- Tesla simultaneously extended its "deepest sympathies" for a fatal, fiery crash and blamed the severity of it on the fact that a highway barrier on USA 101 in Silicon valley had either been removed or crushed without being replaced. In its blog post, Tesla says its data shows its vehicle owners have driven this same stretch of highway with auto-pilot engaged roughly 85,000 times since 2015.

Tesla's problems - which have sent its stock plunging to its lowest point in a year - are legion. Musk vowed to demonstrate a fully autonomous Los Angeles-to-New-York cross-country trip by the end of 2017, but that date has slipped.

Tesla's Autopilot allows drivers under certain conditions to take their hands off the wheel for extended periods. Other carmakers are supplementing their systems with a laser-based system called lidar.

The safety board is also investigating the Uber accident in Tempe, Arizona, in which a Volvo XC90 equipped with the ride-hailing giant's self-driving system failed to slow the vehicle as a 49-year-old woman crossed the street pushing a bicycle. The pedestrian died from the collision.

Late on Tuesday, Moody's Investors Service downgraded Tesla's credit rating to B3 from B2.

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Bears have increasingly criticized Tesla's cash position as it faces pressure to ramp up production for its first mass-market vehicle, the Model 3 sedan.

Moody's said its negative outlook for Tesla "reflects the likelihood that Tesla will have to undertake a large, near-term capital raise in order to refund maturing obligations and avoid a liquidity shortfall".

Model 3 deliveries have fallen short of Musk's lofty goals since the company started building it in July.

Because the company is investing in expanding its production and vehicle lineup, its costs are high and its revenue hasn't yet caught up.

That puts the company in "crunch time" now to improve margins, Cowen & Co. analysts led by Jeffrey Osborne said in a note Tuesday. Although details were scarce as Trump has 15 days to detail which products would face a levy, the Chinese government was quick to respond with its own plan for $3 billion of tariffs on U.S. pork, steel, recycled aluminium, fruit, ginseng, and wine.

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