{"id":2088,"date":"2025-10-24T16:42:30","date_gmt":"2025-10-24T16:42:30","guid":{"rendered":"https:\/\/retrotradingreport.com\/index.php\/2025\/10\/24\/tesla-stock-drop-2-amid-nhtsa-scrutiny-and-profit-declines\/"},"modified":"2025-10-24T16:42:30","modified_gmt":"2025-10-24T16:42:30","slug":"tesla-stock-drop-2-amid-nhtsa-scrutiny-and-profit-declines","status":"publish","type":"post","link":"https:\/\/retrotradingreport.com\/index.php\/2025\/10\/24\/tesla-stock-drop-2-amid-nhtsa-scrutiny-and-profit-declines\/","title":{"rendered":"Tesla stock drop 2% amid NHTSA scrutiny and profit declines"},"content":{"rendered":"
<\/div>\n

Tesla Inc. shares fell 2% on Friday, reversing gains from the previous session, as the National Highway Traffic Safety Administration (NHTSA) sought information about the company\u2019s new driver-assistance mode, dubbed \u201cMad Max.\u201d <\/p>\n

This mode, part of Tesla\u2019s Full Self-Driving (FSD) system, reportedly allows vehicles to operate at higher speeds than other versions, with some drivers on social media reporting instances of cars exceeding posted speed limits.<\/p>\n

NHTSA, which earlier this year opened an investigation into 2.9 million Tesla vehicles with FSD due to traffic violations and crashes, said it is gathering additional information from the company. <\/p>\n

The agency emphasized that drivers remain responsible for complying with traffic laws, and the investigation stems from multiple reports, including six incidents in which Tesla vehicles allegedly ran red lights and caused collisions.<\/p>\n

The \u201cMad Max\u201d scrutiny adds to Tesla\u2019s ongoing regulatory challenges, with the FSD system under review for over a year. <\/p>\n

Tesla clarified that FSD requires active supervision and is not a fully autonomous driving system. <\/p>\n

Despite these assurances, investor concern over potential liabilities and regulatory hurdles weighed on the stock.<\/p>\n

Q3 profit decline despite revenue growth<\/h2>\n

Tesla\u2019s third-quarter adjusted net income fell 29% year-over-year to $1.8 billion, below analyst expectations of $1.9 billion<\/a>, while reported net income came in at $1.4 billion. <\/p>\n

The decline was driven by rising operating costs and a sharp drop in emissions credit revenue, which fell 44% to $417 million following the US government\u2019s reduction of penalties for missed emissions targets.<\/p>\n

Revenue, however, increased 12% year-over-year to $28.1 billion, surpassing market estimates of $26.6 billion, supported by record vehicle deliveries of 497,099 units. <\/p>\n

US demand was bolstered by the federal tax credit, which expired on September 30. <\/p>\n

Despite higher sales, Tesla\u2019s operating expenses surged 50% to $3.4 billion, largely due to investments in AI, autonomous vehicle development, and robotics. <\/p>\n

This resulted in a 40% year-over-year decline in operating income to $1.6 billion and a contraction of automotive gross margin to 15.4%, below analyst expectations.<\/p>\n

The company\u2019s adjusted earnings per share of $0.50 fell short of the $0.54 estimate, marking the fourth consecutive quarter of underperformance relative to Wall Street forecasts. <\/p>\n

While revenue gains demonstrated market demand, shrinking profitability underscored the financial impact of Tesla\u2019s strategic pivot into robotics and advanced technologies.<\/p>\n

Investor concerns over CEO compensation and governance<\/h2>\n

The decline in Tesla\u2019s stock also coincides with controversy surrounding CEO Elon Musk\u2019s proposed $1 trillion pay package<\/a>, which has drawn criticism from proxy advisory firms ISS and Glass Lewis. <\/p>\n

Both firms have urged shareholders to reject the package, citing concerns over its magnitude and potential dilution of shareholder value. <\/p>\n

Musk defended the plan during Tesla\u2019s earnings call, arguing that the package aligns with shareholder interests, as compensation is contingent on achieving ambitious performance targets, including vehicle sales, humanoid robot production, and robotaxi deployment.<\/p>\n

While some analysts remain bullish, citing Tesla\u2019s technological leadership, others have expressed caution over near-term profitability, rising operating costs, and regulatory scrutiny. <\/p>\n

Deutsche Bank and the Royal Bank of Canada raised their price targets<\/a> for Tesla stock, whereas Goldman Sachs maintained a Neutral rating, highlighting concerns over mixed performance metrics.<\/p>\n

The post Tesla stock drop 2% amid NHTSA scrutiny and profit declines<\/a> appeared first on Invezz<\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Tesla Inc. shares fell 2% on Friday, reversing gains from the previous session, as the National Highway Traffic Safety Administration (NHTSA) sought information about the company\u2019s new driver-assistance mode, dubbed \u201cMad Max.\u201d This mode, part of Tesla\u2019s Full Self-Driving (FSD) system, reportedly allows vehicles to operate at higher speeds than other versions, with some drivers…<\/p>\n","protected":false},"author":1,"featured_media":2089,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2088","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/posts\/2088","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/comments?post=2088"}],"version-history":[{"count":0,"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/posts\/2088\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/media\/2089"}],"wp:attachment":[{"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/media?parent=2088"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/categories?post=2088"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/tags?post=2088"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}