What is the reason for Tesla’s decline today?

The price of Tesla (NASDAQ:TSLA) is down today as a result of a deadly car accident that happened over the weekend. According to Trade Algo, a Tesla driver struck a stopped fire vehicle early on Saturday morning on California's Interstate 680. The driver passed away as a result of the collision.

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The incident also resulted in minor injuries for four firefighters inside the fire truck. A Tesla passenger's health is still critical at this time. Although the accident's cause is yet unknown, TSLA stock is declining as the crash's causes are being looked into.

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Let's examine the information provided so far in further detail and what investors can anticipate.

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What is going on with the TSLA stock?

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The TSLA stock is currently down more than 3% and isn't showing any signs of recovering.

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Of fact, Tesla or the performance of the stock market aren't always directly tied to the crash. Today's decline in the Nasdaq Composite is around 2%. Rivian (NASDAQ:RIVN) and Lucid (NASDAQ:LCID), two other EV manufacturers, are performing worse than TSLA stock as well, declining 5% and 9%, respectively. A portion of today's fall can be attributable to the current market's overall bearish momentum.

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Yet, investors shouldn't ignore the most recent crash. Tesla has been putting a lot of effort into winning the driverless race, but its fully autonomous driving (FSD) technology has stirred up a lot of debate. Over the years, numerous accidents employing its autonomous driving (AD) technology have triggered inquiries. Two individuals were killed in a Tesla collision with a stationary tractor trailer in 2022. Meanwhile, The Intercept published film from January 2023 showing a Tesla's driver exploiting the FSD capability to cause an eight-vehicle collision on the San Francisco Bay Bridge.

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It's difficult to remain unconcerned about Tesla's future when these kinds of disasters make the news. Although no one from the National Highway Traffic Safety Administration (NHTSA) has commented on the accident, the organization is now investigating the most recent collision.

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What’s Next?

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There is more bad news for Tesla than just the most recent crash in California. In addition, the corporation has recalled 363,000 EVs over worries about its FSD technology. Tesla will remedy these issues with an over-the-air software update, as it frequently does. But it creates even more concerns about the underlying technology when a severe accident takes place shortly after such a recall announcement.

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Concerns were raised about Teslas equipped with this FSD package driving through intersections in the recall document published by the NHTSA. Similar behavior was shown when the Tesla struck the fire vehicle that was purposefully blocking two lanes of traffic. Of course, no one has confirmed that the car was using autopilot. But, it's difficult to deny how strikingly similar these facts sound to the worries raised by the NHTSA.

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Others have suggested that Tesla's FSD package is riskier than the lidar-based systems employed by other automakers. Even if the NHTSA determines that the current collision was not caused by autopilot technology, unabated worries would eventually hurt TSLA shares. It becomes more difficult for drivers to trust Tesla's technology with each accident and probe.