Tesla Inc. (TSLA), perhaps the most polarizing company on the Street and the most shorted U.S. equity, never ceases to have a dull moment as it takes on new markets and sets out to meet lofty targets with its outspoken Chief Executive Officer Elon Musk at the helm. (See also: Tesla Overtakes Apple as Most-Shorted US Stock.)
This week, the National Transportation Safety Board (NTSB) ended Tesla's status as an official party to the agency's investigation into a March 23 fatal crash involving a Model X vehicle, reported The Wall Street Journal. The unusual public feud between the automaker and the small government agency, which sidelined Tesla from the official probe concerning its semiautonomous driving system Autopilot, revolves around Tesla's alleged violation of an official agreement not to release information about the crash to the public during the ongoing investigation.
Tesla indicated that it withdrew from the agreement with the federal accident investigators, counter to the NTSB's indication that it had thrown the company out, because it clashed with restrictions on what Tesla could share publicly about Autopilot. The Palo Alto, California-based company said the requirement "fundamentally affects public safety negatively" and could block the timely release of relevant information to the public about Autopilot, according to the WSJ. (See also: Why the Bulls Still Believe in Tesla.)
Federal Agency Enters Unchartered Territory
The EV market pioneer made a public statement about the late March crash indicating that the driver, Walter Huang, was at fault when his Model X sport-utility vehicle crashed into a highway barrier near Mountain View, California. Tesla said that while Autopilot was activated before the crash, the driver had time to take control as his hands were not detected on the wheel for six seconds prior to the collision. The family of the late driver is reportedly planning to file a wrongful-death suit against Tesla, claiming that its Autopilot feature is defective.
"It is unfortunate that Tesla, by its actions, did not abide by the party agreement. While we understand the demand for information that parties face during an NTSB investigation, uncoordinated releases of incomplete information do not further transportation safety or serve the public interest," said NTSB Chairman Robert Sumwalt. The agency's investigations can take 12 months or longer to complete, yet the safety board says its procedures call for immediate recommendations if emergency safety fixes are required.
Tesla says it will continue to provide technical assistance to the agency, although it has ceased to have a formal role in the investigation.
Early Morning Twitter Snit
The feud reflects the complexities of a new auto industry era and unchartered territory for government agencies such as the NTSB, which lacks extensive experience looking into autonomous systems for passenger vehicles. As for Tesla, a lesser role in the investigation threatens its massive investment in championing its partially autonomous driving technology, which it says improves safety.
The news comes as Tesla shares jumped on Friday on remarks made my Musk on Twitter in which he responded to a tweet from The Economist that suggested the EV maker will need to raise $2.5 billion to $3 billion in 2018, citing a Jefferies note.
"The Economist used to be boring, but smart with a wicked dry wit. Now it's just boring (sigh). Tesla will be profitable & cash flow+ in Q3 & Q4, so obv no need to raise money," the CEO snapped back. (See also: Tesla Bear Sees Shares Crashing 72% By 2019.)