Tesla's (TSLA, Financial) stock fell by 4.06%, closing at $394.36, following an announcement from U.S. regulators about an investigation into crashes linked to the company's Smart Summon feature. Analysts from Bank of America also downgraded Tesla's stock rating, contributing to the decline.
The National Highway Traffic Safety Administration (NHTSA) is investigating Tesla's Smart Summon and Actually Smart Summon (ASS) features, which allow drivers to move their vehicles remotely via a smartphone app. The agency has received complaints about the vehicles failing to detect obstacles or parked cars, leading to accidents.
The NHTSA's Office of Defects Investigation has received 12 complaints related to the Smart Summon feature and one concerning the upgraded ASS feature. Additionally, they are reviewing at least three media reports on other ASS-related incidents.
Meanwhile, Bank of America's securities division downgraded Tesla's rating from "buy" to "neutral" but raised the target price from $400 to $490. This suggests a potential 25% upside from Tesla's closing price. Analysts noted that despite the higher target price, the execution risks are significant, and Tesla's current trading level aligns with most of their baseline scenarios.
Bank of America analysts are monitoring several potential growth catalysts for Tesla this year, including the launch of a low-cost model in the first half, an autonomous taxi by mid-year, and increased production of Megapack commercial energy storage batteries at the Shanghai facility.
