Shares of Tesla (NASDAQ: TSLA) are trading significantly lower today following reports of a deadly Model S crash this past weekend in which two men were killed near Houston, Texas. The vehicle crashed into a tree and burst into flames shortly after, killing the passengers inside. It reportedly took first responders 4 hours and 32,000 gallons of water to extinguish the flames due to the vehicle’s battery reigniting numerous times. Texas Authorities have launched an investigation into the accident and have reportedly found that no-one was driving the vehicle at the time of the crash since the two victims were found sitting in the front and back passenger seats. It’s assumed that the victims were using the Tesla Model S self-driving feature in an irresponsible manner. The National Highway Traffic Safety Administration has investigated 23 self-driving related incidents to date. Tesla has issued warnings to its customers in the past to stay behind the wheel while using the auto-pilot feature as there is still room for error. There are mechanisms in place to keep drivers safe and alert while using auto-pilot while sitting behind the wheel.
Negative sentiment over self-driving capabilities have spread to other companies that boast similar vehicle features. For this reason, Tesla’s loss has taken much of the EV (Electric Vehicle) sector down with it today. Coupled with the recent crash, investors have grown increasingly pessimistic about Tesla’s performance in the future of the EV market as competitors such as Ford, Hyundai, etc., create alternatives that are viewed as more affordable or safer options than Tesla. Despite the recent skepticism, Goldman Sachs recently recommended that investors buy shares of Tesla as they maintain a positive projection for the Company’s sales this year. This may not be the last time Tesla will address hiccups with their vehicles, however, the Company has a proven track record of being the lead innovator in the EV market. CEO Elon Musk has assured that Tesla will keep working to overcome adversity and find practical solutions for the problems at hand.