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Why Tesla Stock Fell on Tuesday

By Daniel Sparks - Jul 6, 2021 at 11:43AM

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Here are two potential reasons for the decline in the electric-car maker's stock price today.

What happened

Shares of Tesla (TSLA 4.67%) fell on Tuesday, down 3.7% at 12:25 p.m.

The electric-car maker's stock was down likely for two primary reasons: a bearish day for the stock market overall and some comments from Tesla CEO Elon Musk over the weekend about how rolling out self-driving-like features for its vehicle fleet has been more difficult than expected.

A chart showing a stock price declining.

Image source: Getty Images.

So what

In response to a Tesla owner teasing Musk on Twitter for missing a deadline to roll out the next beta version of Tesla's "self-driving" technology (which notably requires drivers to be fully attentive at the wheel and ready to take over), the CEO admitted over the three-day weekend that he hadn't expected achieving "generalized self-driving" to be "so hard, but the difficulty is obvious in retrospect." Musk did, however, say that the next version of the beta "is shipping soon, I swear!"

Meanwhile, a 0.8% decline in the S&P 500 at the time of this writing reflected a bearish day in the overall market, which likely weighed on the growth stock

Now what

To Musk's credit, any driving technology used in production vehicles that even somewhat resembles full self-driving would be quite an accomplishment. In other words, this isn't your average technological development.

Nevertheless, repeatedly missing updates for its full self-driving technology could hurt Tesla's reputation.

Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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