What happened

When it rains, it pours, and shares of Tesla (NASDAQ:TSLA), a vertically integrated sustainable energy company most well-known for its electric vehicles, are down 9% as of 11:25 a.m. EDT Wednesday after a number of negative announcements are weighing on investors. 

So what

Yesterday news hit that the United States National Transportation Safety Board will conduct an investigation into the fatal car crash involving a Tesla Model X on March 23. Per the NTSB, it's currently unclear if the automated control system was active at the time of the crash and issues examined include post-crash fire and steps to make the vehicle safe for removal from scene. It's another tragic incident following a recent self-driving Uber vehicle killing a pedestrian in Arizona. These accidents bring to light an issue the industry knew it would eventually have to face: How fast, and how responsibly, can tech companies and automakers develop and test driverless technology?

Tesla's Model 3 driving on an empty road.

Image source: Tesla.

"We have been deeply saddened by this accident, and we have offered our full cooperation to the authorities as we work to establish the facts of the incident," Tesla said in a statement, according to Reuters.

But there was more weighing on Tesla investors as Moody's Investors Service downgraded Tesla's credit rating on Tuesday with the primary reasons being the company's rapid cash burn and failure to meet production expectations. Moody's noted that Tesla may have to raise more than $2 billion in capital, and cut Tesla's rating to B3, which is six levels below investment grade.

Now what

Tesla's share price is feeling the pain from these recent self-driving incidents as the company has been vocal about its plans to develop Level 5 autonomous driving technology, which enables full hands-free control under all conditions. These accidents could signal a slowdown in driverless technology development and increased regulation. However, Tesla CEO Elon Musk, still believes the Tesla autonomous driving system, Autopilot 2.0, will be two to three times better than a human driver.

Tesla's stock price is taking a hit today due to the fatal crash and credit downgrade, and it's becoming clearer to investors that Tesla needs to hit a home run with the Model 3's production and sales to reassure investors its long-term vision is still firmly attainable.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.