Tesla's recent struggles with its new hardware have cast a shadow over its stock performance. Reports surfaced on December 18, 2024, that Tesla's latest computer chips, intended to enhance its Autopilot and Full Self-Driving systems, are failing after just a few hundred miles. This issue has led to significant operational failures in new Tesla vehicles, affecting critical features like GPS and navigation. The problem is reportedly widespread, impacting vehicles built in recent months, and has not yet been addressed by Tesla through a service bulletin or recall. This technical setback is particularly concerning as it could lead to regulatory scrutiny and potential recalls, further affecting investor sentiment.
Adding to the pressure, Tesla's Shanghai plant manager, Song Gang, resigned on the same day, coinciding with a stalled expansion plan for the Gigafactory. This development raises questions about Tesla's operational stability in one of its key markets. Meanwhile, the broader market sentiment towards Tesla is becoming cautious, as its recent rally is seen as unsustainable without substantial earnings support. Analysts have noted that Tesla's post-election rally, driven by optimism over Elon Musk's ties to the Trump administration, is on "thin ice" and could face challenges as the company's earnings reality sets in.
The Graniteshares 2x Long TSLA Daily ETF (TSLR) is currently trading at $60.46, down 3.37% from the previous close.