Monday saw the share price of Tesla slumping after a Securities and Exchanges Commission investigation was launched after reports of faulty solar panel systems at the company. The fact that the SEC was opening an investigation caused the Tesla share price to fall by 6.4%.
The investigation was launched following a whistleblower from within the brand’s solar systems division reporting that Tesla had failed to report a fire risk that was resultant from defects within the solar panel system.
It is thought that the problem has the potential to affect over 60,000 Tesla customers across the US. The whistleblower complaint was originally issued by a Tesla employee named Steven Henkes in 2019. Henkes was fired in 2020 and he has since sued Tesla claiming that his dismissal was a result of him raising safety fears.
However, the problems didn’t stop there as The New York Times reported that Tesla’s Autopilot driver assistance system may have undermined safety. The problems reportedly emerged after Autopilot focuses on relying purely on the data from a camera to navigate the car, rather than getting extra assistance from other sensors such as external radar.
To make matters worse, the National Highway Traffic Safety Administration opened up an investigation to see whether a faulty Autopilot system could have contributed to a dozen different traffic accidents involving Tesla cars. As such, there are fears that Elon Musk’s proclamations that Tesla’s self-driving cars were fully autonomous and safe could be a touch misleading.
Tesla’s share price managed to reverse following Monday morning’s losses and is back up to $1,068 at the time of writing. Shares in the electric vehicle manufacturer were trading at $729 at the start of 2021, and Tesla has since become one of the few trillion dollar companies.
Tesla stock was at a 52-week high in November but has since fallen by over 20% to enter a bear market which will be discomforting for investors. While any investigation from the SEC generates negative press, the fact that it is focused on solar panel systems shouldn’t dramatically affect Tesla’s main focus on electric car manufacture.
It’s the fact that Tesla’s Autopilot feature has come under scrutiny that will be most discomforting for the brand. Tesla had previously gone on record as stating that its self-driving software only caused one accident in over 4.4 million miles driven. This is much better compared to one accident in every 484,000 miles for drivers of regular vehicles.
With major tech brands like Apple taking big steps to launch their own fully autonomous vehicles at some point between 2023 and 2025, the pressure is on Tesla to maintain its lead in the self-driving car market. Thankfully the US is making big steps to embrace electric car technology with President Biden recently announcing a raft of incentives for the production of more eco-friendly vehicles. All of which suggests that Tesla should overcome this temporary dip.
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