Tesla's stock is experiencing pressure due to a combination of regulatory scrutiny and a downgrade from Bank of America (BofA). The National Highway Traffic Safety Administration (NHTSA) has initiated an investigation into Tesla's Smart Summon and Actually Smart Summon (ASS) features, which allow vehicles to be moved remotely via a smartphone app. The investigation follows complaints about the features' failure to detect obstacles, leading to accidents. This regulatory probe adds a layer of uncertainty for investors, as it could potentially result in a large-scale recall affecting approximately 2.6 million vehicles.
Compounding the regulatory concerns, BofA downgraded Tesla's stock from "buy" to "neutral," citing valuation and execution risks. Despite raising the target price from $400 to $490, BofA analysts expressed concerns about the significant execution risks associated with Tesla's ambitious growth plans, including the launch of a low-cost model and an autonomous taxi service. Analyst John Murphy highlighted that while investor sentiment is positive, the expectations for future growth drivers are already priced in, and Tesla's current trading level aligns with most baseline scenarios.
Tesla's stock is currently priced at $396.4, reflecting a modest increase of 0.52% from its previous close of $394.36 on January 7th.