(Bloomberg) -- Another fatal crash in a Tesla Inc. vehicle and a bearish report about Elon Musk’s struggles to mass-manufacture his first car sent the company’s shares sliding.
Police in southern Switzerland are investigating the death of a German man whose Tesla crashed into a guardrail and burst into flames last week, the Associated Press reported Tuesday. A Morgan Stanley analyst said earlier that the company faces “structural” problems with the Model 3 sedan that risk making sales of the crucial car less lucrative.
Tesla has been under scrutiny for weeks following multiple crashes with its vehicles that have resulted in four fatalities. Musk has been lashing out at the media for its coverage of these incidents and criticized analysts for asking what he said were “bonehead” and “dry” questions about the Model 3 and the company’s cash position during a May 2 conference call.
“The challenges in ramping up Model 3 production reflect fundamental issues of vehicle design, manufacturing process and automation levels that can weigh against the profitability of the vehicle,” Adam Jonas, the Morgan Stanley analyst, wrote in his report. He slashed his price target by 23 percent to $291 and lowered his long-term projection of the company’s profit margins.
Model 3 Pause
Tesla shares closed down 2.7 percent to $284.18 after dropping as much as 3.9 percent shortly after the open. The stock briefly traded near the session low after Reuters reported that the company would temporarily halt Model 3 production from May 26 to May 31 to make assembly line fixes. Musk suggested in an email to employees last month that the company would pause output this month for more factory upgrades.
Bloomberg News reached a representative of police in Bellinzona, Switzerland, who said no one was available to provide details on the fatal incident until Wednesday morning. A Tesla spokeswoman said the company is deeply saddened and is fully cooperating with local authorities.
Tesla hasn’t received data from the car to determine whether the driver-assistance system Autopilot was engaged, she said in an email.
‘Super Messed Up’
Musk, 46, sent a series of tweets on Monday criticizing journalists for not reporting that Tesla makes what he says is the safest car on the road. He reiterated that the company will begin reporting safety-related data on a quarterly basis, starting after the three months ending in June.
“It’s super messed up that a Tesla crash resulting in a broken ankle is front page news and the ~40,000 people who died in US auto accidents alone in past year get almost no coverage,” Musk wrote, referring to coverage of a Tesla crash in Utah.
The Utah driver told the AP that Tesla’s driver-assistance system Autopilot was engaged when she slammed into a fire truck at about 60 miles per hour. The company also hasn’t yet received data from that car and doesn’t know whether Autopilot was engaged, a spokeswoman said Tuesday.
Two of the U.S. National Transportation Safety Board’s four active investigations of Tesla vehicle crashes involve drivers who were using Autopilot.
“It certainly needs to be better & we work to improve it every day, but perfect is enemy of good,” Musk tweeted Monday in reference to Autopilot. “A system that, on balance, saves lives & reduces injuries should be released.”
Musk has a history of criticizing media coverage of Autopilot in stark terms. Months after an Ohio man died using the system in April 2016 on a Florida highway, Tesla hosted a conference call with reporters to announce that the company was introducing new hardware that it’s said will eventually render its vehicles capable of full self-driving.
“If, in writing some article that’s negative, you effectively dissuade people from using autonomous vehicles, you’re killing people,” Musk told reporters.
Musk made similar comments earlier this month during Tesla’s latest earnings call. He said autonomous-vehicle systems won’t reduce crash or fatality rates to zero, though he claimed that current technology reduces the probability of deaths by half.
“It’s really incredibly irresponsible of any journalists with integrity to write an article that would lead people to believe that Tesla autonomy is less safe,” Musk said. “Because people might actually turn it off, and then die. So anyway, I’m really upset by this.”
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