A Tough Week for Tesla
Surprise, surprise! Tesla (NASDAQ: TSLA) is in the news yet again.
Last week, the company’s Tesla Model S caught fire on a Los Angeles street. The vehicle was being driven by the husband of actor Mary McCormack.
Mary McCormack posted a video and tweeted about the accident on Friday night:
@Tesla This is what happened to my husband and his car today. No accident,out of the blue, in traffic on Santa Monica Blvd. Thank you to the kind couple who flagged him down and told him to pull over. And thank god my three little girls weren’t in the car with him.
If this had been the first time that Tesla has had to deal with this kind of news, it would have been one thing. But it isn’t the first time.
Tesla and its vehicles have consistently been in the headlines because of some sort of faulty manufacturing or accident.
Tesla cars run on electricity that’s stored in large battery packs in the floors of the vehicles. So, because of this, there have been some recent incidents of cars catching fire but only after a high-speed impact.
A Tesla spokeswoman responded in an email:
This is an extraordinarily unusual occurrence, and we are investigating the incident to find out what happened. Our initial investigation shows that the cabin of the vehicle was totally unaffected by the fire due to our battery architecture, which is designed to protect the cabin the very rare event that a battery fire occurs.
The National Transportation Safety Board (NTSB) said it would send an investigator to examine the Tesla and to provide some information about what the cause of the accident was.
The NTSB has examined other vehicle fires from Tesla before. So, it can provide an informed understanding of electric vehicle (EV) fires and also how emergency crews can approach and handle the situation.
It may be that companies are still trying to figure out how to make EVs solid products. During the invention of the gas-powered vehicle, there were difficulties and likely accidents.
Tesla has been persistent about its work with EVs and getting a product into the hands of consumers. This could be both a good and a bad thing.
It could be a good thing because, if done well, Tesla would take the lead in a brand-new market. But it could be a bad thing because it means that more attention is directed toward Tesla when accidents or failures happen.
A lot of pressure comes with trying to be a leader in a new market.
Right now, Tesla’s production lines are being pushed to the limit. The company is trying to reach its target of producing 5,000 Model 3 sedans per week.
This past month, Tesla got its output to 3,500 cars and hopes to hit 5,000 by the end of June. The company is close to reaching its goal. But that’s alongside the news of the fire and the news of a former Tesla employee who’s been accused of sabotaging production systems.
According to a company-wide email sent by CEO Elon Musk, a disgruntled former Tesla employee may have given sensitive data to outside sources.
The employee in question allegedly made “direct code changes” to Tesla’s internal operating systems and exported classified information to “unknown third parties.”
This incident doesn’t come at a good time when the company is hoping to finally meet its production goals. Elon Musk described the sabotage as “extensive and damaging.” And at this point, it’s not something that Tesla can afford to deal with.
On Tuesday, Tesla’s shares fell by about 5% in trading.
There could be more bad news coming from the incident with the former Tesla employee, but only time will tell.
There are a lot of businesses out there that would like to see Tesla fail. And if the former employee gave those businesses highly sensitive data about Tesla, that would be extremely bad news for the company.
Until next time,
Jennifer Clark
Pro Trader Today