News that Tesla would have to recall 2 million cars for a safety update rattled the stock, but it soon recovered.
TSLA – Daily Chart
Tesla shares dipped in the news to around $229 but rebounded to $239.29. The rectangle shows a gap in the stock that may have been filled and will produce support for the near term. Resistance is now around $252, with support around the $225 price level.
Tesla announced the recall in the United States after the National Highway Traffic Safety Administration determined that its Autopilot driver-assistance system does not do enough to keep drivers focused. The two-year-long investigation followed 11 crashes with auto-driving technology.
The latest news is further bad publicity for the firm after recent criticism about CEO Elon Musk. However, the recall should smooth the path with regulators.
“It’s progress,” said Mary Cummings, a robotics expert who was critical of the Autopilot system risks, “but minimal progress.”
The latest news comes only a couple of weeks after the long-awaited delivery of the company’s Cybertruck. It is unknown how much the software recall will distract resources as 2 million cars are almost all of the company’s US fleet of EVs.
It was also reported that drivers will face “eventual suspension from Autosteer use if the driver repeatedly fails to demonstrate continuous and sustained driving responsibility while the feature is engaged.”
Elon Musk continues to feel some heat from specific areas. However, investors are committed to the stock as today’s rebound highlights.
