Investing in Tesla Stock (TSLA)

Tesla, Inc., formerly known as Tesla Motors, has grown since its IPO a decade ago into one of the world’s biggest producers of electric vehicles under the leadership of CEO Elon Musk. The company sells cars, SUVs, and trucks. In addition to electric vehicles, it has expanded into energy generation and storage systems. Tesla joined the S&P 500 and S&P 100 on December 21, 2020. Tesla is listed on the Nasdaq exchange under the ticker symbol, TSLA.

The company’s automotive segment accounts for the vast majority of revenue at the Palo Alto-headquartered company, and the U.S. accounts for just under half of sales. Tesla faces growing competition from other major automakers who are developing and marketing electric vehicles, including General Motors Co. (GM), China-based Nio Inc. (NIO), Volkswagen AG (VOW3), and Daimler AG (DAI), the latter two of which are headquartered in Germany.

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Tesla’s Latest Developments

• On August 31, 2021, as part of the current investigation into a series of incidents in which Teslas crashed into parked emergency vehicles, the National Highway Traffic Safety Administration (NHTSA), asked for information about Tesla Autopilot system. The NHTSA also requested details on how many cars Tesla has sold in the U.S. and any arbitrations or lawsuits concerning Autopilot-related crashes. The NHTSA said Tesla has until Oct. 22 2021 to deliver the information or it could face fines of up to $115 million.
• On August 26, 2021 Texas Monthly reported that Tesla filed with the Public Utility Commission of Texas to sell electricity to retail consumers in Texas. The filing is set to be approved or rejected this November. Tesla Energy Ventures as the new utility is calling itself would sell electricity either from the Texas electrical grid or from home-batteries if the grid isn’t working. Tesla would also pay individual solar panel owners for power they send back to the grid, currently this is something only large solar panel operators can do. Tesla also plans to build two enormous batteries that would sell power wholesale in the state.
• On August 16, 2021 the NHTSA announced a formal safety probe into Tesla’s “Autopily” system. The probe was instigated by 11 crashes since January of 2018 in which Tesla cars have crashed into first responder vehicles such a fire trucks. The crashes have caused a total of 17 injuries and one death.
• On August 7, 2021, Tesla announced that its electric pickup truck, the Cybertruck, will not be released until 2022, after initially being scheduled to come out in late 2021.
• On July 26, 2021, Tesla release its earnings report for Q2 FY2021. It exceeded analysts’ estimates on both adjusted earnings per share (EPS) and revenue.
• On July 12 and July 13, 2021, Tesla CEO Elon Musk testified in a suit brought by Tesla shareholders. The plaintiffs alleged that he used the 2016 acquisition of SolarCity by Tesla as a bailout for the former, when he was the chair of both companies’ boards. If he loses, he could be required to pay more than $2 billion to the company.
• On June 29, 2021, Consumer Reports and the Insurance Institute for Highway Safety restored their highest safety endorsements for Tesla Model 3s. The endorsements were removed in May after Tesla announced that it would no longer include radar in Model 3s and Model Ys made for sale in North America. The National Highway Safety Safety Administration (NHTSA), which said that non-radar-equipped models did not meet its standards for certain recommended safety technologies, has not reversed its rulings.
• On June 26, 2021, Tesla started a recall of over 285,000 of its cars in China due to an issue with the cars cruise control. The cruise control would sometimes activate automatically when the driver changed gears, causing the car to accelerate. The issue affects a number of imported Tesla Model 3s and Model Y and Model 3s made in China. Tesla says the issue can be resolved by a free software update without having to return the car.
• On June 13, 2021, Tesla CEO Elon Musk tweeted that Tesla would again accept Bitcoin when approximately 50% of its mining is done with clean energy.
• On June 1, 2021, the Wall Street Journal reported that Tesla’s CEO, Elon Musk, had violated the court order requiring that all his tweets be pre-approved by Tesla lawyers. The court order is the result of a 2018 settlement with the Securities and Exchange Commission (SEC) after he was charged with securities fraud for tweets he made regarding taking the company private.
• Also on May 25, 2021, Tesla announced it would be recalling 5,974 of its Tesla Model 3 cars would be recalled due potential problems with brake caliper bolts. If the bolts loosen, it “may cause a loss of tire pressure, increasing risk of a crash,” according to the National Highway Traffic and Safety Administration.
• On May 25, 2021, Tesla announced that it would be no longer be including radar in its Model 3 and Model Y cars manufactured for sale in North America. While most automakers are working on using a combination of cameras and other sensors, such as radar to increase cars’ autonomy, Elon Musk is pushing to do so only using cameras and machine learning. The decision caused Consumer Reports to pull its “Top Safety Pick+” label from the Model 3. The National Highway Traffic and Safety Administration said that the radar-less vehicles will no longer get a check mark for a number of categories including automatic emergency braking.
• On May 12, 2021, Tesla CEO Elon Musk announced that Tesla would no longer accept Bitcoin as payment for its cars due to the substantial carbon emissions caused by Bitcoin mining.
• On May 4, 2021, Stellantis, the car company formed by the 2020 merger of Fiat Chrysler Automobiles (FCA) and Peugeot, announced that by 2022 it will no longer need to purchase carbon credits in order to meet EU emissions standards. Between 2019 and 2021, FCA bought $2.4 billion in emissions credits from Tesla, a key factor in Tesla’s shift to profitability that allowed it to enter the S&P 500.