Tesla is in the process of releasing its first-quarter performance results and address an accident. A fatal crash occurred last week and the Tesla Model X caught fire, which prompted a federal investigation into the occurrence.
According to Reuters, the U.S National Transportation Safety Board confirmed the inquiry into Tesla on Tuesday. In addition, as the news of the fatal crash was reported, the Tesla stock was in the mix of a big selloff.
The Tesla stock dropped 8.2 percent or $25 a share. It closed at $279.18 and was the lowest in nearly a year. The Tesla stock was not the only thing down in price. Per Moody Investors Service, Tesla was downgraded from a credit rating of B2 to B3.
Moody said the ratings “reflect the significant shortfall in the production rate of the company’s Model 3 electric vehicle.” It also “faces liquidity pressures due to its large negative free cash flow and the pending maturities of convertible bonds.”
As the NTSB and the police investigated, questions stemmed from the accident. What is unclear if Tesla’s automated control system performed most of the driving. The collision included two other vehicles. Tesla cars are equipped with an Autopilot feature that handles some of the driving tasks. The 38-year-old Tesla driver passed away in a hospital right after the crash.
Tesla’s stock plunged more than 8% in Tuesday trading in the wake of a deadly accident involving a Tesla with an automated control system https://t.co/fNWUbdqv1O— The Wall Street Journal (@WSJ) March 28, 2018
Tesla, upon learning the passenger’s outcome, wrote a response via a blog post. They asserted that they do not know what exactly transpired in the moments leading up to the accident and cannot determine what may have caused it.
“Our data shows that Tesla owners have driven this same stretch of highway with Autopilot engaged roughly 85,000 times since Autopilot was first rolled out in 2015 and roughly 20,000 times since just the beginning of the year, and there has never been an accident that we know of. There are over 200 successful Autopilot trips per day on this exact stretch of road,” Tesla wrote.
As reported by Techcrunch, the accident caused the Tesla Model X to catch fire. Furthermore, Tesla explained that the battery packs are designed in such a way so that people have enough time to exit the vehicle.
The electric car manufacturer is facing financial pressures. Tesla has, at the present time, $230 million in convertible bonds maturing in November 2018 and $920 million in March 2019. Moddy Investors added the company’s rating is light of maturing obligations.
Tesla is looking to produce 2,500 of the Model 3 car by the end of the March. Also, it is projecting to double the production to 5,000 on a weekly basis by the end of June. The production expectations are down for Tesla, which had planned 5,000 a week at the end of 2017 and 10,000 by the end of 2018.
It will be interesting to see what the outcome of the investigation has to reveal. Also, how well will Tesla perform in its upcoming quarterly report will be certainly watched by industry analysts.