1. NHTSA is investigating Tesla's FSD due to traffic-safety violations. 2. 2.88 million Tesla vehicles reported running red lights with FSD engaged. 3. Four crashes linked to FSD resulted in injuries. 4. NHTSA's inquiry could lead to a potential recall of affected vehicles. 5. FSD has been under investigation by NHTSA for over a year.
Regulatory scrutiny often leads to negative investor sentiment, as seen with other automakers. For example, recalls on safety grounds have historically resulted in stock price drops for affected companies.
Given the scale of vehicles affected and potential recalls, this is a significant issue. Regulatory actions can lead to broader consumer sentiment shifts against a brand.
Immediate investor reactions to regulatory investigations typically manifest quickly, impacting stock prices in the near future.