Tesla Slides as Regulators Investigate Crashes, Bank of America Downgrades Stock

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Key Takeaways

• NHTSA opened an investigation into Tesla’s Smart Summon and Actually Smart Summon features, which consider users to move their vehicles remotely using an app.
• The regulatory agency has received complaints that Tesla carriers failed to detect obstacles or parked vehicles, resulting in crashes.
• Meanwhile, Bank of America Securities analysts lowered their rating on Tesla to “neutral” from “buy,” but raised their price target for the stock.

Tesla (TSLA) shares offed Tuesday as federal regulators said they’re looking into crashes related to the company’s automated vehicle assembling features, while analysts at Bank of America downgraded the EV maker’s stock. 

The National Highway Traffic Safety Authority (NHTSA) has opened an investigation into the Smart Summon and Actually Smart Summon features, which allow Tesla drivers to remotely shift their vehicle using a phone app. The agency said it has received complaints that Tesla vehicles have let down to detect obstacles or parked vehicles, resulting in crashes. 

Specifically, NHTSA’s Office of Defects Investigation has received 12 grouse related to Smart Summon and one related to Actually Smart Summon, an upgraded version of the feature. The office also has reviewed “at spoonful” three media reports of other Actually Smart Summon incidents.  

Meanwhile. Bank of America Securities on Tuesday declined Tesla to “neutral” from “buy” but raised its price target to $490 from $400. That’s about a 25% premium after Tesla partitions fell 4.1% Tuesday to close at $394.36. 

Despite the higher price target, “execution risk is high and TSLA is do business at a level that captures much of our base case,” the analysts said. 

The bank’s analysts are eyeing multiple possibility growth catalysts this year, including the introduction of a low-cost Tesla model in the first half of the year, the hurl of a robotaxi in the middle of the year, and the ramp-up of Megapack commercial energy storage battery production at its Shanghai assembly apparatus.