Company working with authorities to recover data from Model X
Carmaker hasn’t disclosed whether driver was using Autopilot
The company is working with authorities to retrieve data logs from the vehicle that crashed Friday, killing the driver, according to a Tesla blog post. Tesla didn’t say whether the vehicle’s Autopilot system was engaged but preemptively defended the driver-assist feature, which it’s developing as a precursor to autonomous driving.
March has been brutal for Tesla, with shares falling on all but five days and the company this week losing its perch to General Motors Co. as the most valuable U.S. automaker. The stock declined 7.7 percent Wednesday to $257.78. Its unsecured bonds have hit all-time lows ahead of the release of first-quarter production results expected next week. The tone of the day was captured in analyst reports, with Cowen & Co. saying it’s time to “question Autopilot leadership” at Tesla and Sanford C. Bernstein focusing on the “fallacy of automation” to boost production.
The crash, which is being investigated by U.S. authorities, adds to Chief Executive Officer Musk’s challenges including concerns that the electric-car maker won’t reach its production targets for the all-important Model 3 sedan. The accident also potentially raises fresh questions about self-driving features after a deadly Uber Technologies Inc. accident that happened days earlier and sent ripples across the broader autonomous-vehicle industry.
“We have in the past questioned Tesla’s promise that the current hardware will be able to eventually provide full self-driving capability,” Cowen analyst Jeffrey Osborne, who rates Tesla as “underperform,” wrote in a note. Given regulators’ reaction to the fatal Uber crash, “we see a large risk” that the self-driving equipment and capabilities Tesla has been touting to customers many not meet the eventual government standards, he wrote.
Tesla’s bonds dropped 3 cents on the dollar to 88 cents at 4:36 p.m. in New York, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority after reaching their lowest price ever earlier Wednesday.
Wei Huang, 38, died when his Tesla collided with a highway barrier on southbound Highway 101 near Mountain View and caught fire, according to the California Highway Patrol. The driver’s LinkedIn profile identifies him as a software engineer who joined Apple Inc. in November after more than a decade at Electronic Arts Inc. Apple didn’t respond to a request for comment.
The U.S. National Transportation Safety Board said in a tweet on Tuesday that it was sending investigators to examine issues raised by the accident, including the post-crash fire and steps needed to make the vehicle safe to remove from an accident scene.
Tesla’s battery packs are designed so that when a fire occurs, it spreads slowly so people have more time to exit or be removed from the car. “That appears to be what happened here as we understand there were no occupants still in the Model X by the time the fire could have presented a risk,” the company said in its blog post.
The collision caused extensive damage partly because a safety barrier meant to reduce the impact into a concrete lane divider had been removed or crushed in a prior accident without being replaced, according to Tesla. Tesla owners have driven the same highway stretch with Autopilot engaged about 85,000 times since the system was introduced, and no accidents have been reported that the company is aware of, the carmaker said.
Tesla’s approach with Autopilot has been to field a suite of driver-assistance features that are continuously improved via over-the-air software updates and help build toward more advanced autonomous capabilities. Tesla has said all cars now being made at its factory in Fremont, California, including the Model 3, have the hardware needed to one day be fully self-driving.
Reaching that capability will require extensive software validation and regulatory approvals. Musk vowed to demonstrate a fully autonomous Los Angeles-to-New-York cross-country trip by the end of 2017, but that date has slipped.
Tesla’s Autopilot team has suffered from leadership turnover over the past year and a half. Sterling Anderson left Tesla in December 2016 and was ultimately replaced by Chris Lattner, who was hired from Apple and lasted roughly six months at Tesla. In June 2017, Tesla hired Andrej Karpathy, a research scientist from OpenAI, another Musk enterprise.
The safety board’s probe into the Mountain View crash is the second this year involving the company’s vehicles. Tesla’s approach to autonomy, which includes cameras and radar, is just one of the designs automakers are developing under the watchful eyes of federal and state regulators. Other carmakers are supplementing their systems with a laser-based system called lidar.
The NTSB is also investigating this month’s Uber accident in Tempe, Arizona, in which a Volvo XC90 equipped with the ride-hailing giant’s self-driving system failed to slow the vehicle as a 49-year-old woman crossed the street pushing a bicycle. The pedestrian died from the collision.
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Moody’s Investors Service on Tuesday downgraded Tesla’s corporate family rating to B3, six levels into junk, and said its outlook on the company is negative. The credit rater cited “the significant shortfall in the production rate of Tesla’s Model 3” and liquidity pressures as two chief concerns.
“The negative outlook reflects the likelihood that Tesla will have to undertake a large, near-term capital raise in order to refund maturing obligations and avoid a liquidity short-fall,” Moody’s analysts wrote.
Model 3 deliveries have fallen short of Musk’s lofty goals since the company started building it in July. Bloomberg’s Model 3 tracker estimates the company may be making about 975 of the cars a week, well short of the target to build at a 2,500-unit rate by the end of this quarter.
An analyst at Citigroup Inc. wrote Tuesday that Tesla may be struggling to convert car shoppers into Model 3 buyers, while Robert W. Baird & Co. said Monday the company might not achieve its weekly production goal by the end of March.
“This is the most negative sentiment I’ve seen in a while,” Ben Kallo, an analyst at Baird, said Tuesday. “It’s really about the Model 3 production and ramp up, and the shorts are piling in.”
— With assistance by Claire Boston