Equities
Tesla faces a July deadline to submit Autopilot data or risk $135 million in fines amid ongoing safety and legal scrutiny.
By Barry Stearns
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The National Highway Traffic Safety Administration (NHTSA) has issued a deadline of July 1 for Tesla to provide comprehensive details about its Autopilot driver assistance system. This follows a voluntary recall in December, affecting approximately 2 million vehicles in the U.S., aimed at enhancing driver engagement mechanisms. The recall was a response to concerns over the system's monitoring of driver attentiveness during the use of Autopilot features such as traffic-aware cruise control and auto-steering. Despite the recall, there have been at least 20 crashes involving Tesla vehicles where Autopilot was believed to be in use. The NHTSA's investigation, spanning three years, identified that Tesla's Autopilot had been a factor in 467 collisions and 14 fatalities from January 2018 through August 2023, citing inadequate driver engagement and insufficient warning systems.
Tesla's Autopilot system is not only under the microscope by the NHTSA but also faces scrutiny from the Department of Justice and the Securities and Exchange Commission regarding its self-driving claims. These legal challenges are unfolding as Tesla experiences a downturn in its stock performance, with shares dropping 3.8% to $177.81 and a 28% decrease in 2024. The company's sales have also seen a decline, with an 18% year-on-year drop in shipments from its Shanghai factory in April, despite the growing market for new-energy vehicles. This backdrop of regulatory and market pressures comes as Tesla undergoes a significant reorganization, including layoffs that have impacted its Autopilot and vehicle safety engineering teams.
The broader U.S. equity market exhibits cautious optimism, with slight fluctuations in the S&P 500, Nasdaq 100, and Dow Jones Industrial Average futures. This sentiment is partly driven by expectations of potential interest rate cuts by the Federal Reserve within the year. Noteworthy stock movements include Ambac Financial's 14% increase after a significant earnings per share growth, contrasted by Disney's 8.9% decline due to disappointing Disney+ subscriber numbers. These market dynamics underscore the sensitivity of stock performances to earnings reports and economic forecasts.
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