Tesla Drops 5% on Phantom Braking Complaint, Mustang Mach E Takes Top Spot

Electric vehicle (EV) manufacturer Tesla Inc. (TSLA) has been facing a slew of bad news in 2022, pushing its shares down almost 27% year-to-date. The company is being hurled with investigations and recalls, especially from the NHTSA.

The National Highway Traffic Safety Administration (NHTSA) has initiated a probe into the unexpected braking of the EV while using the advanced driver assistance system (ADAS).

Meanwhile, rival Ford Motor Company’s (F) Mustang Mach-E has won the EV Top Pick for 2022 as per the Consumers Reports’ awards.

This news has further impacted Tesla’s stock price, pulling it down 5.1% to close at $876.35 on February 17.

NHTSA Probes Phantom Braking

Over the last nine months, the NHTSA has received 354 complaints from 2021-2022 Model 3 and Model Y drivers related to the phantom braking issue. The phantom braking issue is supposedly happening ad hoc without issuing any warning to the drivers. Thankfully, to date, no accidents have occurred due to the issue.

The said vehicles are loaded with Tesla’s Autopilot feature, aka ADAS, which allows the vehicle to navigate and brake automatically within its lanes.

The NHTSA’s Office of Defects Investigation (ODI) Resume mentioned on its website, “The complaints allege that while utilizing the ADAS features including adaptive cruise control, the vehicle unexpectedly applies its brakes while driving at highway speeds. Complainants report that the rapid deceleration can occur without warning, at random, and often repeatedly in a single drive cycle. ODI is opening this Preliminary Evaluation (PE) to determine the scope and severity of the potential problem and to fully assess the potential safety-related issues.” 

Mustang Mach E Beats Tesla Model 3 as Top Pick for 2022

According to Consumer Reports, Ford’s Mustang Mach-E has overtaken Tesla’s Model 3 as the Top EV Pick for 2022. For the last two consecutive years, one of the best EV stocks, Tesla’s Model 3, was the Top Pick.

The Mustang Mach-E won the top spot based on the best Overall Score on factors such as road-test score, predicted reliability, owner satisfaction, and safety.

Commenting on the superior quality of Mach-E, the Consumer Reports stated, “Mustang Mach-E is also very sporty, plus it’s more practical and easier to live with. The Ford is also quieter and rides better. Both cars have large infotainment center screens, but the Mach-E’s is far easier to operate and doesn’t require multiple steps to activate routine features, such as using the defroster or adjusting the mirrors, as with the Tesla. Also, the Mach-E has an edge when it comes to reliability, according to first-year results in our Annual Auto Surveys of CR members.”

Wall Streets’ View

The Wall Street community has awarded TSLA stock a Moderate Buy consensus rating based on 17 Buys, 7 Holds, and 5 Sells. The average Tesla price target of $1,120.60 implies 27.9% upside potential to current levels.

News Sentiment

TipRanks data shows that the News Score for Tesla is currently Neutral based on 248 articles over the past seven days, at the time of writing. 55% of the articles have a Bullish Sentiment compared to a sector average of 64% while 45% of the articles have a Bearish Sentiment compared to a sector average of 36%.

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