Why Tesla Stock Got Dinged Today

What came about

Shares of Tesla ( TSLA -5.60% ) obtained hit Thursday morning — but don’t freak out, it used to be handiest a fender bender. Aloof, the electric automobile stock used to be down 3.3% as of 11: 07 a.m. ET on news that the Nationwide Highway Traffic Security Administration (NHTSA) is investigating the corporate.

That’s lawful. Again.

Two drivers examine a fender bender.

Image source: Getty Pictures.

So what

Now, this could well perchance well even sound appreciate faded news to you.

In the end, it used to be right three days within the past that The New York Times reported on an NHTSA investigation into allegations that the Autopilot driver-assistance plot contributed to “on the least 12 accidents in which Teslas using Autopilot drove into parked fireplace trucks, police cars and assorted emergency automobiles.” Thursday’s file furthermore comes from the Times — but that is peaceable a special memoir.  

This time, the topic below investigation is that Tesla’s tool permits folks to play video video games on the automobiles’ in-plug infotainment plot monitors whereas driving. Teslas be pleased offered their occupants the skill to play particular video video games on these monitors for years — but handiest whereas the automobiles had been parked. Over the summer season, even supposing, the automaker it sounds as if issued a tool replace that enables these video games to be played whereas the vehicle is in movement.

As the NHTSA commented, “distraction-affected crashes are a disaster, namely in automobiles outfitted with an array of convenience applied sciences comparable to leisure monitors [and] the Vehicle Security Act prohibits producers from selling automobiles with originate defects posing unreasonable risks to security.”

Now what

There’s an implied risk in that bald statement of shadowy-letter law, finally: If the NHTSA deems the skill to play video video games whereas driving a “originate defect,” the company can also provide an explanation for Tesla to forestall selling automobiles.

However if the inherent risk to the change here is evident, the resolution is correct as evident: Tesla desires to self-discipline a unique tool replace that turns off folks’s skill to play these video games in transit. Declare solved, and Tesla’s stock should peaceable acquire its 3.3% lawful relief.

This text represents the idea of the creator, who can also disagree with the “reliable” advice space of a Motley Fool top class advisory provider. We’re motley! Questioning an investing thesis – even one among our possess – helps us all inform severely about investing and make decisions that relief us turn out to be smarter, happier, and richer.

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