Tesla Higher, Despite Autopilot Controversy; Investors Should Monitor Investigations

Federal highway safety regulators are investigating whether Tesla's autopilot technology was responsible for a recent, fatal crash.
By Matt Thalman ,

It was another roller-coaster ride for Tesla (TSLA) - Get Report shareholders on Friday. The stock opened the day in the red, down more than 2.7%, but fought back and closed up more than 2.5%, helping some wise traders make a quick profit.

The early morning sell pressure came from the announcement that federal highway safety regulators were investigating the company following the first fatal accident in which Tesla's autopilot feature was used.

The initial concern was that the Tesla Model S involved in the crash was at fault. Such a scenario could have severe implications for the company's revenue and profitability. 

But there's evidence that the driver error and not Tesla technology may have been at fault. A DVD player was still playing a movie when emergency workers arrived. 

This was the first crash in more than 130 million miles of semi-autonomous driving for Tesla. 

The National Highway Traffic Safety Administration will be investigating the 25,000 Model S vehicles that are equipped with the autopilot feature. If driver inattention is to blame for the recent accident, a worst case scenario is that the company will face fines, fees and maybe a recall. 

Companies like Alphabet, Mobileye, Intel, BMW and the other automakers who are testing self-driving vehicles will be paying close attention to the investigations. They stand to lose out if the penalties are severe. 

In turn, investors in any of these companies should be watching this story unfold as it may directly affect the speed at which we see the technology on the road.

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This article is commentary by an independent contributor. At the time of publication, the author held positions in Intel, Tesla, and Alphabet.

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