Tesla’s FSD Faces a New Safety Probe. Options Data Tells Us TSLA Stock Could Be Headed Here.

Tesla (TSLA) [https://www.barchart.com/quotes/TSLA] is in focus today after the National Highway Traffic Safety Administration (NHTSA) launched a comprehensive investigation into its Full Self-Driving (FSD) technology.

The investigation into 2.88 million vehicles focuses on over 58 recorded incidents of serious traffic violations, including vehicles running red lights and making improper lane changes. 

Despite regulatory challenges, Tesla stock is up nearly 100% [https://www.barchart.com/stocks/quotes/TSLA/performance] versus its year-to-date low at writing.
www.barchart.com [https://www.barchart.com/stocks/quotes/TSLA/interactive-chart]

NHTSA PROBE IS MEANINGFULLY NEGATIVE FOR TESLA STOCK

This investigation marks the third NHTSA probe into TSLA this year alone, highlighting escalating regulatory concerns about the company’s autonomous driving technologies.

The timing of this probe is especially challenging for Tesla, as its billionaire chief executive, Elon Musk, pursues ambitious plans to deploy hundreds of thousands of driverless taxis [https://www.barchart.com/story/news/34004339/elon-musk-predicts-tesla-will-have-autonomous-ride-hailing-in-probably-half-the-population-of-the-us-by-the-end-of-the-year] across U.S. cities by year-end. 

Markets will closely follow this investigation as its outcome could notably impact the company’s autonomous driving initiatives and potentially affect investor confidence in its leadership position in this transformative technology. 

In short, the regulatory scrutiny is concerning for TSLA stock as it poses a significant challenge to the EV manufacturer’s strategy of achieving full autonomy through incremental software updates to existing vehicles. 

WHERE OPTIONS DATA SUGGESTS TSLA SHARES ARE HEADED

Options data from Barchart indicates a trading range of about $354 to $521 for contracts expiring on Jan. 16. 

Meanwhile, the expected move in Tesla shares through the end of next week is 4.91%, implying a trading range of $416.65 to $459.66. The near-term skew, as evident, favors caution. 

With the NHTSA investigation casting a regulatory shadow and competitive pressure intensifying across the electric vehicle [https://www.barchart.com/investing-ideas/ev/stocks/profiles] landscape, downside scenarios appear more plausible. 

In short, until TSLA delivers a clear catalyst that offsets these concerns, the path of least resistance may tilt lower. 

WALL STREET REMAINS BEARISH ON TESLA 

Wall Street’s view on Tesla stock is skewed to the downside as well. 

According to Barchart [https://www.barchart.com/stocks/quotes/TSLA/analyst-ratings], the consensus rating on TSLA shares currently sits at “Hold” only, with the mean target of roughly $336 indicating potential downside of about 23% from here.
[A graph on a computer screen AI-generated content may be incorrect.]www.barchart.com [https://www.barchart.com/stocks/quotes/TSLA/analyst-ratings]_ This article was created with the support of automated content tools from our partners at Sigma.AI. Together, our financial data and AI solutions help us to deliver more informed market headline analysis to readers faster than ever. On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here [https://www.barchart.com/terms#disclosure]. _