It’s downhill without brakes. If Wall Street is a good thermometer for gauging how well a company is doing, it is also one for sinking it. Like falling dominos, the creditors of Elon Musk are more than worried about the consequences of the fatal accident where a person died aboard a Model X.
After learning that the National Transportation Safety Board is investigating what happened, the company’s stock has plummeted.
“On the precipice”
Preliminary report issued for investigation of fatal March, 21, 2018, crash of a Nannarone Rans Inc S-16 Shekari, near Pierce, Nebraska; https://t.co/13UTGw3TGX
â€” NTSB_Newsroom (@NTSB_Newsroom) March 29, 2018
In August, investors made an ‘all in’ in that ‘infernal production’ that Elon Musk talked so much about in order to take Model 3 forward. Unfortunately, the bottlenecks and the breaches in the objectives were louder, but Wall Street has remained under the Musk effect, dazzled by the promises and plans of another world.
Now they have serious doubts, because there have already been two fatalities aboard a Tesla. On Wednesday, Tesla shares plunged into the stock market at a rate of 86 cents on the dollar; the biggest drop since 2016, according to Bloomberg.
To all this we must add that Moody’s has downgraded Tesla’s credit rating to junk.
Analysts see the situation very bleakly as being “on the precipice,” and predict that Tesla may have to consider selling shares, issuing convertible bonds and structured debt or acquiring bank loans. They wonder if it can really take autonomous cars to the masses before it runs out of money.
Wall Street is now looking at the production of Model 3 with much nervousness.
In a space of five days, there have been two fatal accidents in which the autonomous technology has been involved. The first one occurred in Arizona: a woman was run over by an autonomous Uber car while crossing an unmarked road.
2 NTSB investigators conducting Field Investigation for fatal March 23, 2018, crash of a Tesla near Mountain View, CA. Unclear if automated control system was active at time of crash. Issues examined include: post-crash fire, steps to make vehicle safe for removal from scene.
– NTSB_Newsroom (@NTSB_Newsroom) March 27, 2018
The second, in California, has had as protagonist Tesla: the driver crashed head-on into a median. The Model X in which he was traveling has been so destroyed that they have not been able to recover the data record of the car.
Tesla has reported that they still does not know what caused the accident or if the Autopilot was connected, but that the barrier against which the victim struck was not replaced after the last accident.
The accident caused a fire that ended up destroying the vehicle, but Tesla argues that any combustion car in the United States “is five times more likely to burn than a Tesla.” At the moment, there are no calls to review.
This raises many questions, perhaps the least explored is how to put out a fire in an electric car and how they will have to adapt safety protocols to electric batteries.