Tesla (TSLA) – Get Tesla Inc Report plans to expand what it calls its full-self-driving capability, but the new head of the National Transportation Safety Board reportedly is not so keen on the idea.
The Palo Alto, Calif., electric-vehicle producer’s shares fell more than the slumping broad market after the news, recently trading at $733.82, down 3.4%.
Tesla had gained 16% over the six months through Friday.
The move would help cars wend their way through cities. For now, the driver-assistance system is meant mostly for highways.
But Jennifer Homendy, who last month took over as chairwoman of the NTSB, told The Wall Street Journal that Tesla shouldn’t go ahead with the change before taking care of what the agency sees as safety problems in the system.
“Basic safety issues have to be addressed before they’re then expanding it to city streets and other areas,” she said.
“Full self-driving capability” doesn’t mean what you might think. Tesla tells drivers to stay engaged, with their hands on the wheel.
The company didn’t comment to the Journal.
Morningstar analyst Seth Goldstein puts fair value at $600 for Tesla.
“We award Tesla with a narrow-moat rating,” he wrote in a commentary last month.
“Tesla’s moat stems from … intangible assets and cost advantage. The company’s strong brand cachet as a luxury automaker commands premium pricing in the luxury auto market, while Tesla’s electric-vehicle-manufacturing expertise allows the company to make its vehicles cheaper than its competitors.
“Tesla’s brand cachet is not likely to be impaired any time soon as other automakers move into the battery-electric-vehicle space.”