The 2020 pandemic hit many companies hard, while other companies took it as a chance to grow, seemingly unaffected by the state of the world around them. NVIDIA (NASDAQ:NVDA) came out as one of those thriving businesses and achieved gains of 122% in 2020. The company’s graphics processing units (GPUs) were present and needed for trends that accelerated exponentially due to the pandemic, boost...
This morning, many investors started their day with a shock.
Out of seemingly nowhere, Tesla’s (NASDAQ: TSLA) stock value dropped a total of 5.3% over the weekend.
Of course, with Tesla being a prevalent growth stock, this quickly led several of the company’s shareholders to wonder about what had taken place to cause this unexpected turnaround.
Well, here’s what happened with Tesla over the past couple of days.
An incident involving a driverless Tesla vehicle
Last Saturday, an incident in the Houston suburb of Spring, Texas, was reported by the authorities.
As stated, two men were killed in a crash involving a Tesla Model S. Apparently, it was unable to drive through a curve and ended up losing control, hitting a nearby tree.
However, official investigations have agreed that no one was in the driver’s seat at the moment of the crash. In addition, collected evidence showed that the car had crashed while moving at high rates of speed.
When trying to piece together the course of events that led to the incident, many went on to point out the vehicle itself. This particular model has recently integrated an Autopilot feature that Tesla has proudly been promoting to the masses as an essential part of their newest line of vehicles.
Originally meant to assist the driver in making sure the car follows the lane as properly and smoothly as possible, this feature has instead been the receiver of much criticism from both safety experts and a significant portion of Tesla’s clientele.
While Tesla has previously stated that the vehicle still requires active driver supervision, several incidents involving this function have already been reported around the country. In each of them, owners have been seeing them as an opportunity for lowering their attention while driving, leading to incidents that they could have easily prevented.
In response, several critics have blamed this phenomenon on Tesla’s marketing campaigns surrounding this particular function. They make it easy for the average customer to misconceive that their cars can genuinely drive independently.
Regardless, while more details about this particular incident are yet to be unfolded, it has already reignited people’s massive concerns regarding Tesla’s confident implementation of this function.
And what it all means for Tesla in the stock market?
Tesla has yet to comment regarding this most recent controversy.
When considering these recent doubts regarding their product line and their ongoing neglect regarding this particular situation, it stands to reason that a significant number of investors quickly decided to drop out of Tesla. Of course, this leading to a sudden stock drop.
So the question has to be asked.
Will this controversy bring down any long-lasting consequences for the company?
We don’t know yet. However, given Tesla’s reputation, it is the likeliest that it won’t.
Their next business performance will come out the following week, just as the first financial quarter of 2021 comes to a close.
If you’re a Tesla investor, our recommendation would be to wait until that day comes. Once you can study their performance and evaluate their prospects for the near future, you are at freedom of making any decision regarding your status as a shareholder.