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Why Tesla stock crashed and burned again on Wednesday

It’s bad news all around for the electric car pioneer.
The post Why Tesla stock crashed and burned again on Wednesday appeared first on The Motley Fool Australia. –

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Tesla (NASDAQ: TSLA) stock slipped 2.5% in morning trading on the NASDAQ Wednesday, apparently hurt by a pair of bad news items — and a Barron’s report — just the day before.

As Barron’s reports, “safety appears to be the main reason” Tesla stock is struggling this week, as investors worry over news that one Tesla investor’s new Model S Plaid electric car burst into flames last week — while a separate family has launched a wrongful death suit against the company, blaming the performance of its “Autopilot” driver-assistance software.

So what

Some details are in order. Regarding the Plaid fire, The New York Post reported late last week that “a brand-new Tesla Model S Plaid … burst into flames in Pennsylvania” Tuesday in “a harrowing unexplained inferno.” That’s bad PR in and of itself, but what may make it worse is that the EV in question was owned by Susquehanna analyst Bart Smith.

While it’s not yet certain, this incident has the potential to turn “a longtime fan of the brand” into an enemy of Tesla — which might not be great news for the stock price.

Separately, The New York Times says a family in California is accusing Tesla of “partial” responsibility in the death of a 15-year-old child who was killed when a Tesla, possibly operating on Autopilot, collided with the family’s pickup truck.

Now what

All that being said, some context may also be in order. Because it’s a high-profile company, bad news about Tesla tends to gravitate to the top of news headlines. But according to data from Tesla — which admittedly has a vested interest in setting the record straight on this front — the first quarter of 2021 saw an average of:

One accident per 4.2 million miles driven on cars using Autopilot, versus…
One accident per 2 million miles driven in Teslas not using Autopilot but using other “active safety features,” versus…
One accident per 978,000 miles driven in Teslas using neither Autopilot nor other active safety features, versus…
One accident per 484,000 miles driven in cars in the United States on average.

Long story short and headlines notwithstanding, the data sure does seem to suggest that Teslas are anywhere from twice to nine times safer than any other car on the road — and over the long term, that data has to be good news for the stock price.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock crashed and burned again on Wednesday appeared first on The Motley Fool Australia.

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More reading

Australia’s favourite international shares? Tesla (NASDAQ:TSLA) tops the list

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Could Tesla build 1 million vehicles this year?

Wondering which US shares Aussies bought last quarter? Here’s the answer

How big could Tesla get by 2030?

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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