Tesla’s stock slid Friday after Elon Musk warned that the electric-car maker could run out of cash in less than a year — even as US regulators revealed that Tesla’s controversial “Autopilot” software was activated during yet another fatal crash.
In a Thursday memo to employees, Tesla’s chief executive said the company will run out of money in 10 months if it continues to bleed cash at the current rate. That’s despite the fact that Tesla earlier this month raised $2.7 billion in a sale of stock and convertible notes.
“Going forward, all expenses of any kind anywhere in the world, including parts, salary, travel expenses, rent, literally every payment that leaves our bank account must (be) reviewed,” Musk said in the memo, which was first obtained by Electrek and Reuters.
That helped send Tesla shares tumbling more than 7.5 percent, closing at $211.03, in Friday’s trading.
“When your revenues aren’t improving, you have to look at other ways to boost the bottom line, and that’s continued cost cutting,” said CFRA Research analyst Garrett Nelson. “That’s not what you want to see, this is supposed to be a growth company. It raises a lot of red flags.”
Separately on Thursday, the National Transportation Safety Board published a preliminary report that found Tesla’s Autopilot system was engaged in the moments before a fatal crash in March.
In a grisly accident that bore an uncanny resemblance to a fatal 2016 crash that grabbed headlines worldwide, the NTSB said Tesla owner Jeremy Banner was driving his Model 3 in Autopilot mode on a highway on March 1 in Palm Beach County, Fla., when a semi truck pulled out in front of it.
The Tesla, which had been in Autopilot mode for 10 seconds, didn’t slow down in the moments leading up to the crash and Banner’s hands never touched the wheel, according to Tesla’s data. The truck’s trailer sheared off the top of the car, killing Banner, and the car continued for another 1,600 feet before it ground to a halt in the median.
The accident bore an eerie similarity to a Florida highway crash three years earlier, when Joshua Brown was killed when his Tesla passed under a semi truck that was crossing a highway in Williston, Fla.
The investigation has not yet determined whether the driver was at fault in March’s accident, but raises questions about the safety of Tesla’s software, which it has pitched to customers and investors as the future of driving.
Tesla said it was “deeply saddened” by the accident, and that its “thoughts are with everyone affected by this tragedy.”
“Tesla drivers have logged more than 1 billion miles with Autopilot engaged, and our data shows that, when used properly by an attentive driver who is prepared to take control at all times, drivers supported by Autopilot are safer than those operating without assistance,” the company added.
“Despite the fact that Tesla has a number of very bright engineers — and for all his faults, Elon is brilliant — the structural challenges of autonomous driving are significant and perhaps insurmountable,” said DA Davidson analyst Tom Forte.
The NTSB’s report comes just a week after a porn star made waves for posting a video of herself having sex with her boyfriend in the front seat of a Tesla driving on Autopilot.
When word of the video reached Chief Executive Elon Musk, he responded nonchalantly and didn’t mention any safety concerns, despite the fact that Tesla states in its Autopilot guide that the feature “intended for use with a fully attentive driver, who has their hands on he wheel and is prepared to take over at any time.”
“Turns out there’s more way to use Autopilot than we imagined,” Musk tweeted.
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