What happened
Shares of Tesla (TSLA 3.33%) stock tumbled 3.9% as of 11:50 a.m. EDT Monday. The reason can be summarized in three little letters: "FSD."
And four more: "NTSB."
Image source: Getty Images.
So what
Tesla is getting ready to release its Full Self-Driving beta software in the U.S., notes Electrek, which you would think would be good news for the company, seeing as Tesla charges its users $10,000 when they sign up to enable FSD capability on their electric cars, or $199 a month when they rent the capability. The problem is, the National Transportation Safety Board wants Tesla to slow its roll(out).
Citing concerns about the software's safety, and in particular "a spate of crashes in which Teslas that had been operating with Autopilot engaged ran into one or more parked emergency vehicles such as police cars," new NTSB head Jennifer Homendy is encouraging state and federal agencies in charge of traffic safety to "proactively address potential future crashes and future deaths by taking action, by issuing regulations, performance standards aimed at saving lives," reports The Wall Street Journal.
Before Tesla sends a new round of software updates into the wild, encouraging drivers to use its FSD software in city driving as well as on highways, Homendy says the company needs to address "basic safety issues" with its software.
Now what
Now, as the Journal points out, the NTSB itself does not have regulatory authority to turn its advice into laws that would bind Tesla. What the NTSB does have, however, is a bully pulpit from which to condemn Tesla publicly for the "misleading and irresponsible" decision to market its Autopilot software as "Full Self Driving" at a stage of development when regulators such as the Washington State Transportation Commission warn it is "definitely a work in progress."
As regulators pile onto Tesla, they have the potential to delay rollout of FSD software -- and subscriptions -- to the estimated 1.4 million or so Tesla owners who have so far not signed up for it. At $10,000 a pop, that's a $14 billion market that Tesla wants to rush into, but for the time being, regulators are stomping on Tesla's brakes.
