Tesla’s NHTSA Review Could Significantly Impact Other Self-Driving Industry Players

On August 13, the U.S. National Highway Traffic Safety Administration (NHTSA) opened a review into Tesla Inc.’s (NASDAQ: TSLA) Autopilot system that has been installed in 765,000 of the company’s models produced between 2014 and 2021. The key catalyst for the inquiry, which is the biggest in Tesla’s history, seems to be 11 collisions since 2018 with emergency vehicles at “first responder scenes” that killed one and injured 17.

The agency plans to assess the role that Tesla’s driverless technology may have played in the accidents. The probe is a marked departure from NHTSA practices of recent U.S. Administrations. Until now, the agency seemed reticent to regulate self-driving technology, fearing that by doing so it would stifle the adoption of potentially life-saving systems.

Tesla’s model Y

One self-driving expert has theorized a way in which crashes with stopped emergency vehicles can happen: Tesla cars equipped with its Autopilot technology are designed to ignore stationary objects when traveling at speeds above 40 mph. By doing so, the vehicles do not aggressively brake when approaching an overpass or cars stopped temporarily on the shoulder of the road. Autonomous driving vehicles pay much less attention to road flares or flashing lights around an accident scene than a fully engaged human driver.

Uncertain Financial Impact on Tesla

It is difficult to assess the potential financial implications for Tesla. On the one hand, the cost could be quite modest. Indeed, the NHTSA concluded an earlier investigation into Autopilot without taking any action. 

On the other end of the spectrum, the agency could choose to upgrade the investigation to an engineering analysis. After that more intensive analysis is completed, which could take a year, the NHTSA could demand a recall.

Estimating the cost of a potential recall is extremely challenging. One recent example is General Motor’s recall of 69,000 all-electric Chevrolet Bolt models for potential battery problems that could lead to a fire. GM set aside about US$11,600 per vehicle, a huge figure, to cover the cost of that recall.

In the past, Tesla investors have been willing to look past operating disappointments like production shortfalls, as they focused on longer term, big-picture issues. Perhaps in this case, the Tesla investor base may do so again.

Other smaller development companies in the autonomous driving space may not be so lucky, as investors may wait for the details of the NHTSA’s investigation before allocating more investment dollars to the space. One such potentially affected company is Luminar Technologies, Inc. (NASDAQ: LAZR), a global leader in automotive lidar (light detection and ranging) hardware and software technology. Autonomous driving vehicles would likely employ lidar sensors.

Another affected company could be TuSimple Holdings Inc. (NASDAQ: TSP). TuSimple is developing a fully autonomous driving solution for long-haul heavy-duty trucks. While the tech will be inherently differentiated from that of Tesla’s, regulation in the space could pose as a major negative impact this early in the developing sector.

Tesla last traded at US$711.92 on the NASDAQ.


Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

New Found Gold: The Strategic Maritime Resources Purchase

Amex Exploration: Revised Perron PEA Has INSANE Economics

Aris Mining: The Multi Billion Dollar Soto Norte PFS

Recommended

Canadian Copper Secures $8 Million Lead Order From Ocean Partners As Part Of Larger Funding Round

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Related News

Ross Gerber Thinks Elon Musk Doesn’t Live in the Real World, Shouldn’t Blackmail Investors Into Doing What He’s Supposed to Do Anyway

Ross Gerber is progressively becoming disillusioned with Tesla CEO Elon Musk, for whom he used...

Sunday, January 21, 2024, 11:22:00 AM

Baidu USA Receives Driverless Vehicle Permit from California DMV

The race for electric and autonomous vehicles appears to really be heating up, especially in...

Monday, February 1, 2021, 11:47:00 AM

Surprise: Elon Musk Fan The Boomer Haus Calls Out X for Not Delivering Its End of the Deal

The Elon Musk-loving X-verified organization The Boomer Haus may finally be coming into — as...

Monday, October 2, 2023, 11:02:00 AM

Tesla: FinTwits’ Analysis On The Q4 2023 Financials

Tesla (NASDAQ: TSLA) last night released its financial results for the fourth quarter of 2023,...

Thursday, January 25, 2024, 10:08:48 AM

Tesla Engineer Reveals Elon Musk Overstated Autopilot Capabilities

It appears that Tesla CEO Elon Musk has been overstating the capability of its self-driving...

Saturday, May 8, 2021, 10:19:00 AM