The debate over the safety of Tesla Motors‘ (NASDAQ:TSLA) semi-autonomous technology continues. Recently, the owner of a Tesla Model X, who crashed his SUV in Montana on July 9th as he drove through into a guardrail after striking several wooden supports, has released an open letter [via electrec] to Tesla CEO Elon Musk, stating the company is trying to cover up issues with its ‘Autopilot’ software.
Calling himself “Mr. Pang,” the man writes that immediately following the accident, Tesla issued a statement, saying the Autopilot – a system implying full autonomy but one that actually has much more limited capabilities – was not used appropriately at the time of the crash.
Describing the accident, Mr. Pang said – “It happened so fast, and we did not hear any warning beep. Autopilot did not slow down at all after the crash, but kept going in the original speed setting and continued to crash into more barrier posts in high speed. I managed to step on the break, turn the car left and stopped the car after it crashed 12 barrier posts.”
Mr. Pang also claims that Tesla never contacted him after the accident.
“Tesla just issued conclusion without thorough investigation, but blaming me for the crash. Tesla were trying to cover up the lack of dependability of the autopilot system, but blaming everything on my hands not on the steering wheel.”
Mr. Pang insists that he used the autopilot system correctly and that he did not receive any warnings, as Tesla claims, from his vehicle prior to the accident. He said the car veered on its own into the barrier. Mr. Pang also noted that Tesla “was not interested in why the car veered right suddenly, nor why the car did not slow down during the crash.”
In the letter, the owner of the Model X took things a bit further as he accused the electric car maker for using Tesla drivers as “lab rats” for testing its Autopilot system. Several other Autopilot incidents, including a fatal May 7 crash in Florida now under investigation by the National Highway Traffic Safety Administration have generated plenty of discussion about the capabilities and limitations of Tesla’s novel self-driving feature. Mr. Pang asked the Palo Alto, California-based company to take responsibility whenever one of their cars’ supposedly “beta” autopilot systems are involved.
Earlier this month, Michelle Krebs, a senior analyst at AutoTrader said that self-driving vehicles “hold much promise for improving road safety, but more work is needed with the technology, regulations and consumer confidence, which could be shaken by accidents like this.” Krebs also suggested that “Tesla might want to consider a voluntary recall or stop sale on its vehicles equipped with the Autopilot feature.”
Tesla Stock Reaction
The last thing Tesla wants is the publicity that it is getting right now. It not only affects its reputation but also investor sentiment given the fact the company will report second-quarter earnings on August 3 after market close. The report will be for the fiscal quarter ending June 2016. The Street is looking for EPS of ($0.51) and revenue of $1.67 billion. Last quarter, Tesla posted a positive earnings surprise of 5 percent, reporting EPS loss of ($0.57), $0.03 better than the Street’s consensus estimate of ($0.60). Just like in previous quarterly reports, investors focus will be on the company’s progress in building up its production capacity. Earlier this month, Tesla announced that it produced 18,345 vehicles in 2Q16. Tesla has said it expects to produce and deliver 50,000 vehicles in the second half of this year, approximately equal to all of 2015.
Despite these somewhat encouraging numbers, Tesla’s investors have punished the stock. TSLA is currently down more than 14% year-over-year, compared with a 4.88% gain in the S&P 500. The name, which based on next year’s estimates trades with a P/E of well over 78, has lost about 9% in the past three months.
As the equity continues to vacillate near the top of a multi-week trading range, if it fails to break the $230 level, it should run into its first level of support located at $227.59. Next support is at $225.69 and $223.79, respectively.
Tesla was last trading Tuesday at $229.13, down $0.88, or 0.38 percent, from Monday and well off its $271.57 52-week high. Shares of the $33.82 billion market cap company are down 5.13% since Jan. 1.
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This guy is a nut job, and of course he didn’t hear beeps, what he ignored were multiple visual alerts before he finally put his hands on the wheel and steered in the wrong direction. Is this guy so clueless that he doesn’t realize Tesla has the whole log? Or is he playing publicity games to get them to cover for his rather costly mistakes? I’m thinking the latter…what a “pang” in the @ss.