Home/Markets/Elon Musk crisis as Tesla shares dramatically crash after allegations of two major faults
Elon Musk crisis as Tesla shares dramatically crash after allegations of two major faults
NewsroomDecember 7, 2021
express– Shares in Tesla ran fell on the NASDAQ on Monday morning. The price dropped 4.8 percent as of 10 am US EDT. Tesla share prices dropped from £866 ($1149) at the beginning of December to a current price of £754 ($1000).
The slump came after a double whammy of negative news for Mr Musk's electric car company.
The first negative announcement about the company came from a whistleblower within Tesla's solar systems division.
The insider claimed to the US Securities and Exchange Commission (SEC) that the company "failed to properly notify its shareholders and the public of fire risks associated with solar panel system defects over several years".
Reuters reported that the SEC has now taken the allegations seriously and has opened an investigation.
As of writing the SEC and Tesla have both declined to comment on the claims.
However, the scale of the scandal could be significant, affecting "more than 60,000 residential customers in the US and 500 government and commercial accounts".
The second piece of bad news to affect the Tesla price came from the New York Times.
The US news outlet reported that Tesla "may have undermined safety in designing its Autopilot driver-assistance system" for electric cars.
Tesla claims its autopilot system relies exclusively on camera data to interpret its environment.
This is an alternative to supplementing cameras with radar and lidar sensors as other car companies are trying to do.
The complications are increased by news the National Highway Traffic Safety Administration is now investigating whether this decision might have contributed to "at least 12 accidents in which Teslas using Autopilot drove into parked fire trucks, police cars and other emergency vehicles".
As the price of Tesla stocks nose dives Elon Musk's net worth is estimated to have fallen by £11 billion ($15.2 billion).
According to the Bloomberg Billionaires index, this leaves Mr Musk's fortune at £200 billion ($268.9 billion).
This is up 72 percent for the year.
The billionaires' wealth fell as technology stocks tumbled amid fears of inflation and economic tightening.
The news comes after Philippe Houchois, autos analyst at Jefferies, said the Tesla share price could rise by 30% over the next 12 months.
Tesla has been contacted for a reply but have yet to return one.
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