Tesla's (TSLA) Autopilot Reported to Cause Another Crash

The Autopilot mode in Tesla, Inc.'s (TSLA) electric cars is fast turning out to be the company's Achilles Heel. Tesla recorded yet another accident for one of its cars equipped with the Autopilot feature. On Saturday morning, just before 5:00, a Tesla Model 3 in Autopilot mode hit a state highway patrol cruiser in Orlando, Florida. The car missed hitting a state trooper who was heading out to help a car that had broken down on the highway.

  • A Tesla Model 3 in Autopilot mode crashed into a state trooper's car on a Florida highway.
  • News of the crash did not have a material effect on Tesla's stock price.
  • Investor nonchalance may be because the crashes have not had a material effect on Tesla's sales numbers and recent advancements in the company's Full Self-Driving (FSD) technology.

Tesla is already under investigation by the National Highway Traffic Safety Administration for a series of accidents involving its cars that occurred between January 2018 and July 2021 across nine states.

The Autopilot mode in Tesla's cars automates some tasks related to driving, but the company cautions drivers to maintain control by placing their hands on the steering wheel. Tesla claims that Autopilot mode helps avert accidents, and its CEO Elon Musk has tweeted statistics to prove the point. However, critics say that those statistics lack important context and ignore the age of the average car—approximately 12 years—being driven on American roads. 

"NHTSA reminds the public that no commercially available motor vehicles today are capable of driving themselves. Every available vehicle requires a human driver to be in control at all times and all state laws hold human drivers responsible for operation of their vehicles," the NHTSA stated. 

While there have been many accidents and crashes (in some cases fatal) involving Tesla's Autopilot feature, their effect on the company's stock price seems to be waning. News of the latest crash did not have a material effect on Tesla's stock price. Tesla shares are trading at $736, unchanged from the price a day earlier, as of this writing.

The minimal price movement marks a contrast to previous instances when fearful investors sent the company's stock in a tailspin after adverse news. For example, the stock crashed by more than 4% after the NHTSA announced its investigation in mid-August. It fell by 8% in 2019 after the National Transportation Safety Board (NTSB) ruled that the Autopilot feature was engaged during a fatal crash in March of that year. 

Investors' nonchalance to the latest news may be due to two reasons. First, even as it has faced multiple safety concerns, Tesla has become an expert at navigating regulation. Most investigations into Autopilot technology have absolved the feature of blame from accidents and crashes of Tesla cars. More importantly, the investigations have yet to hinder sales numbers, which continue to increase on a quarterly basis, for its cars.

Second, investors may be holding out hope for Tesla's promised Full Self-Driving (FSD) technology. It promises complete autonomy, meaning that drivers can take their hands off the wheel after Tesla's artificial intelligence system takes over driving functions. Development of the technology is still in Beta mode.

During the company's recent AI day, CEO Elon Musk called the technology "amazing," although he said that the latest beta was "actually not great." According to a tweet from Musk, " … the Autopilot/AI team is rallying to improve as fast as possible,"