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Tesla stock has risen more than 100% so far this year.
Shoko Takayasu/Bloomberg
Tesla
investors always have a lot to digest. The latest issues are about driver-assistance features, stock ratings, and movies. Some sound serious, but none of these factors were really moving the stock in early trading Wednesday. There is good reason for that.
The most serious issue in focus is the disclosure of a letter the National Highway Traffic Safety Administration, or NHTSA, sent to
Tesla
(ticker: TSLA) in late July. The agency asked the electric-vehicle maker for details about adjustments to its driver-assistance features that would allow a driver to keep their hands off the wheel for an extended period.
Tesla didn’t respond to a request for comment. NHTSA said it doesn’t comment on open investigations.
Most new cars have driver-assistance features that do things like maintain speed, steer along a street, and brake automatically. All of those features, including Tesla’s, require drivers to stay engaged 100% of the time. The responsibility is on the driver, but automakers also have systems to ensure compliance. Some use internal cameras, others require haptic feedback on the steering wheel, and some models have both.
Tesla has both, but a Tesla driver has to apply pressure to the steering wheel once in a while or the driver-assistance system will shut off, turning control of the vehicle back to the driver. NHTSA is asking about a driver-assistance configuration that will bypass the haptic feedback. It’s a change that could lead to drivers not paying attention.
The agency has been investigating Tesla’s driver-assistance features since 2022, focusing on “the technologies and methods used to monitor, assist, and enforce the driver’s engagement with the dynamic driving task during Autopilot operation.”
While the business of automotive safety is, of course, serious, automakers can adjust settings, and the NHTSA, in some situations, can require alterations. Ultimately, none of this is existential for Tesla’s driver-assistance features. Tesla bulls and bears debate whether Tesla is too cavalier with its driver-assistance marketing, but the NHTSA’s letter or 2022 investigation likely won’t change any of those opinions.
Tesla stock rose almost 8% Tuesday as news of the letter was disseminating. Shares fell 1.8% in early trading Wednesday while the
S&P 500
and
Nasdaq Composite
both ticked up about 0.1%.
The stock is giving up some of its gains from the previous session, but there was also a new report Wednesday from Guggenheim analyst Ronald Jewsikow reiterating his Sell rating on Tesla stock. He is concerned that U.S. EV inventories are rising and that Tesla stock is benefiting too much from AI hype.
He has a point. EV sales hit a record in the U.S. in the second quarter, but the supply of vehicles is improving, meaning more competition and lower prices. What’s more, part of Tesla’s near-8% gain on Tuesday was spurred by reports it was starting up a new artificial intelligence computing cluster to train its driver assistance software. That’s $60 billion in market value, thanks to a computer.
Still, Jewsikow’s rating and $125 price target didn’t change. His views, essentially, are already reflected in Tesla’s stock price.
Tesla investors also got some good news Wednesday. A plan for a Tesla charging station—plus a drive-in theater with diner—appears to be a go in Los Angeles. Tesla apparently is now in the movie business. That, however, isn’t likely to be a needle mover for company earnings.
Tesla already operates the largest network of fast-charging stations in the U.S.
Write to Al Root at [email protected]
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