Advertisement
Canada markets close in 3 hours 25 minutes
  • S&P/TSX

    22,172.98
    +65.90 (+0.30%)
     
  • S&P 500

    5,250.68
    +2.19 (+0.04%)
     
  • DOW

    39,758.21
    -1.87 (-0.00%)
     
  • CAD/USD

    0.7389
    +0.0017 (+0.22%)
     
  • CRUDE OIL

    82.65
    +1.30 (+1.60%)
     
  • Bitcoin CAD

    95,991.27
    +2,363.94 (+2.52%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,238.30
    +25.60 (+1.16%)
     
  • RUSSELL 2000

    2,133.53
    +19.18 (+0.91%)
     
  • 10-Yr Bond

    4.1870
    -0.0090 (-0.21%)
     
  • NASDAQ

    16,385.36
    -14.16 (-0.09%)
     
  • VOLATILITY

    12.92
    +0.14 (+1.10%)
     
  • FTSE

    7,961.09
    +29.11 (+0.37%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • CAD/EUR

    0.6838
    +0.0033 (+0.48%)
     

How Tesla could be impacted by the fatal crash in Texas

Garrett Nelson, CFRA Analyst, joins Yahoo Finance’s Kristin Myers and Alexis Christoforous to discuss the latest news on the Tesla fatal crash.

Video Transcript

- Two passengers were killed in a crash of a Tesla Model S on Saturday, in which there was no one sitting in the driver's seat. This crash happened in a suburb outside of Houston. It killed the person in the front passenger seat and one in the rear seat of the car. And of course, this crash is currently under investigation. We see shares of Tesla coming under some pressure here today. Joining us now is Garrett Nelson, CFRA Analyst who covers Tesla. Garrett, what was your first thought when you heard about this deadly crash, and what's it going to mean for Tesla and Elon Musk?

GARRETT NELSON: Sure. Thanks for having me today. Our first thought was there's certainly going to be an investigation announced. And in fact, that's what happened just a few hours ago. The National Highway Transportation Safety Administration announced that they've opened a probe into the crash. We know that anytime a Tesla vehicle is involved in a high-profile crash such as this one, with very suspicious circumstances, it garners a lot of attention. And you know, there's a lot of scrutiny surrounding Tesla because of their autopilot technology, because of some of the claims that Elon Musk and the company make surrounding the technology. But we'll see where this goes.

ADVERTISEMENT

One thing I would say is that there have been many probes into Tesla crashes in recent years. In fact, there have been 28 NHTSA probes. And 24 of those probes are still active. So you know, one of the things we've seen in recent years is a reluctance to really clamp down very hard on Tesla. They've kind of been given a pass. So we'll see what happens with this. I would say the significance of this is it's the first major incident under the transportation department of the new administration. So we'll have to see where this goes.

- Garrett, I'm just looking at the stock action right now, Tesla down almost 4%. Curious to know if you think that investors are going to be looking at Tesla a little bit differently perhaps in the longer term, especially around that autopilot technology.

GARRETT NELSON: Sure. It's one of the concerns that we have. We currently have a hold rating on the shares. A lot of that is because the stock had a meteoric run-up in 2020. Tesla shares were up over 700% last year. And there's various concerns that we have surrounding the story. And just add this development to that list of concerns. But we kind of view 2021 as a year in which Tesla will be finally facing a lot more competition in electric vehicles than they have in recent years, from the likes of upstarts such as Lucid Motors, Rivian, but also traditional automakers who are making a much bigger push into EVs, such as Volkswagen, Daimler, and also some of the traditional US automakers.

- You know, it's interesting that you laid out for us, Garrett, how many active investigations there are against Tesla, yet I'm curious if there has been a correlation between those outstanding investigations and people buying their vehicles. You know, has there-- has that dented sales at all? And if it hasn't, do you think it's because there hasn't been a real competitor, and that might start to change in the coming months and years ahead?

GARRETT NELSON: It really hasn't hurt-- none of these headlines, those very high-profile crashes have really impacted Tesla whatsoever. In fact, they've continued to grow their market share. In the US, they've more than quadrupled their market share in the US electric vehicle market over the last five years. So you know, if anything, they continue to pick up market share. But we think their market share is probably pretty close to a peak in 2020.

So you know, they just haven't had the competition, and they've really benefited from that. That will be changing very soon. In fact, in the next six months or so, you will see Lucid and Rivian vehicles on the road. You will see a number of new models from traditional automakers in electric vehicles on the road, as well. So it's really the increased competition has us cautious on the stock here.

- Garrett, just looking out more broadly at this space, a lot of different companies trying to jump into let's move now to autonomous vehicles. You've got Cruise, you've got Waymo. Nuro was a company that we were chatting about recently, with their partnership with Domino's. Does something like this, this crash from this autopilot mode, which of course is that precursor to a fully autonomous vehicle, do you think that causes pressure to the AV space, raises even more questions about the feasibility of autonomous vehicles on our roads?

GARRETT NELSON: Yeah, it certainly doesn't help. We'll see what the investigation shows. The early reports is that no one was in the driver's seat. It's unclear if a driver was in the driver's seat and got ejected to another seat due to the crash. So that's unclear right now. You have to let the investigation play out. But you know, these sorts of headlines don't help, and they don't instill confidence in that technology, which many people are very skeptical of. And there's a lot of reluctance out there, you know, and calls for-- from both sides of the aisle on Capitol Hill to really clamp down.

And you know, some of the Tesla's claims regarding the technology, you know, a lot of people view as irresponsible. So when they call this feature full self-driving, you know, are consumers actually thinking they're getting a full autonomous vehicle. It's not a full level five autonomous vehicle. They're not there yet. In fact, they're somewhere around level three. So we still think fully autonomous vehicles are years away.

- All right, we're going to leave it there. Garrett Nelson, CFRA Analyst, thanks for coming on and talking Tesla with us.