Announcement of a federal investigation into a fatal crash and vehicle fire prompted a big sell off of Tesla stock and a plunge in the share price, a media report said.
Tesla shares fell 8.2%, or US$25, to close at $279.18 on Tuesday, the lowest close in almost a year, after news of the NTSB investigation, Reuters reported.
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Late on Tuesday, Moody's Investors Service downgraded Tesla's credit rating to B3 from B2 saying the ratings "reflect the significant shortfall in the production rate of the company's Model 3 electric vehicle" and that it also "faces liquidity pressures due to its large negative free cash flow and the pending maturities of convertible bonds".
Tesla shares fell another 2.6% in after hours trading, the report added.
Reuters noted Tesla has $230m in convertible bonds maturing in November 2018 and $920m in March 2019 and that Moody's said its negative outlook reflects the likelihood that Tesla will have to undertake a large, near-term capital raise in order to refund maturing obligations and avoid a liquidity shortfall."
Moody's said Tesla was targeting weekly production of 2,500 Model 3 vehicles by the end of March, and 5,000 per week by the end of June, down from the company's year earlier production expectations of 5,000 per week by the end of 2017 and 10,000 by the end of 2018. Tesla plans to provide an update on Model 3 production next week.
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By GlobalDataIn last week's accident, it was unclear if Tesla's automated control system was driving the car, Reuters said. The accident involved two other cars, the NTSB and police said. Autopilot in Tesla models handles some driving tasks. The 38 year old Tesla driver died at a nearby hospital shortly after the crash.
Late Tuesday, Tesla said in a blog post cited by the news agency it does "not yet know what happened in the moments leading up to the crash" but added data shows that Tesla owners have driven the same stretch of highway with Autopilot engaged "roughly 85,000 times… and there has never been an accident that we know of".
The company said it was working with authorities to recover the logs from the computer inside the vehicle to try to gain a better understanding of what happened. The company statement did not address if the crashed vehicle was in Autopilot mode, Reuters noted.
Reuters said government scrutiny of the Palo Alto, California company is mounting – this is the second NTSB field investigation into a Tesla crash since January.
The California Highway Patrol said the electric Model X crashed into a freeway divider on Friday and then was hit by a Mazda before colliding with an Audi. The Tesla's lithium batteries caught fire and emergency officials consulted company engineers before determining how to extinguish the battery fire and move the vehicle safely. NTSB said the issues being examined included the post-crash fire and removing the vehicle from the scene.
The Tesla blog post said Tesla battery packs were designed to ensure that a battery fire spreads slowly in the rare circumstance it catches fire.
In January, the NTSB and US National Highway Traffic Safety Administration sent investigators to California to investigate the crash of a fire truck and a Tesla that apparently was traveling in semi-autonomous mode. The agencies have not disclosed any findings, Reuters said.
