Tesla Shares Fall on Safety Probes, Downgrade

Key Takeaways

  • Tesla (TSLA) shares sank 3% on March 8, 2023, amid news of safety investigations and an analyst downgrading the stock.
  • The National Highway Traffic Safety Administration (NHTSA) indicated that it knows of two reports regarding the steering wheel detaching on Tesla’s Model Y vehicles.
  • Regulators are also looking into another accident that may be related to Tesla’s advanced driver assistance system.

Federal safety regulators have opened an investigation of Tesla (TSLA) over a potential issue that may cause the steering wheels to come off of the company’s Model Y SUVs. 

The National Highway Traffic Safety Administration (NHTSA) indicated that it is aware of two reports of “complete detachment of the steering wheel from the steering column while driving” in 2023 Model Y vehicles. The NHTSA report noted that both vehicles were delivered without a retaining bolt that connects the wheel to the column.

NHTSA said that one of the complaints came from an owner and the other from the manufacturer. The owner reported that the Model Y was purchased on Jan. 24, and the wheel came off while driving on a New Jersey highway five days later.

The NHTSA explained that it was conducting a preliminary investigation to assess the scope, frequency, and manufacturing processes associated with this condition. It affects about 120,000 vehicles. 

Autopilot Crash Investigation

Regulators also announced that they were opening another probe into a crash suspected of being related to Tesla’s advanced driver assistance system. Since 2016, the NHTSA has conducted more than three dozen investigations into possible Tesla autopilot accidents.

Tesla shares lost 3% on March 8. Along with the safety probes, the stock was impacted by a downgrade from Berenberg analyst Adrian Yanoshik, who lowered his rating to hold from buy. Still, Tesla shares are up more than 47% so far this year.