NHTSA "Recall" impact on TSLA

[FluxCap]

Why are we still talking about this as if it is affecting short-term price? It's really not. The finding was at least partially (maybe fully) priced into the stock already with the German agency's definitive and positive announcement. I expect an irrational bump up when NHTSA makes a statement, but it will be just that -- irrational.

Remember, NHTSA doesn't much care about preserving a car during a collision, just preserving driver and passenger safety. Further, for them to contradict the German agency's ruling would be fairly unprecedented and odd. The Tesla Model S, as-is, is still the safest car they have ever tested. They can't and won't just arbitrarily decide they don't like the way a car is built.

Making current trading decisions based on fears of further negative action related to this issue is not wise, IMO. The things to watch for around earnings that will move the stock, as has been said by others, are improvement in margins, sales projections, and progress in ramping production. The market has already priced in safety concerns.

 

[FANGO]

Why are we still talking about this as if it is affecting short-term price? It's really not. The finding was at least partially (maybe fully) priced into the stock already with the German agency's definitive and positive announcement. I expect an irrational bump up when NHTSA makes a statement, but it will be just that -- irrational.

Remember, NHTSA doesn't much care about preserving a car during a collision, just preserving driver and passenger safety. Further, for them to contradict the German agency's ruling would be fairly unprecedented and odd. The Tesla Model S, as-is, is still the safest car they have ever tested. They can't and won't just arbitrarily decide they don't like the way a car is built.

Making current trading decisions based on fears of further negative action related to this issue is not wise, IMO. The things to watch for around earnings that will move the stock, as has been said by others, are improvement in margins, sales projections, and progress in ramping production. The market has already priced in safety concerns.

Why are we talking about it period? The fact that all these people are STILL wringing their hands about something which is and always was a nonissue shows that there will be an irrational bump up because just look at all the irrational people talking here. This wasn't ever an issue and it still isn't. If you don't want your car to break, don't run into large pieces of metal. If you want to be safe, drive a model s. Problems solved.

 

[AlMc]

Why are we talking about it period? The fact that all these people are STILL wringing their hands about something which is and always was a nonissue shows that there will be an irrational bump up because just look at all the irrational people talking here. This wasn't ever an issue and it still isn't. If you don't want your car to break, don't run into large pieces of metal. If you want to be safe, drive a model s. Problems solved.

I do not feel that this situation is an irrational fear. You may be right that the safety issues/non issues have been already built into the current price by many people. However, I do not feel that the market as a whole has built the outcome of the NHTSA into the price they are willing to pay for TSLA. While I do not believe we will see a negative report/recall/remedy come out from NHTSA it is possible . So, I feel that it is a legitimate subject to discuss. Based on the number of people who have contributed to this part of the conversation today it appears many agree.

As to next few days price. I think we have seen the 'pop' from the auto show catalysts (6,900 deliveries, projection of doubling of staff at TM in 2014 and projection of how safe the overall car is and how well it does in snow per Jerome). With no negative or positive catalyst I feel we trade in the mid 160s to low 170s as we wait for 4th Q ER and 2014 guidance in late February. If the stock stays in that band I expect another 'pop' and good run up to low 180s. If we slowly run up to 180s over the next month before ER then I feel the 'good news'..China demand, Giga factory partnership, build guidance will be built into the stock price with a smaller 'pop'. If we run up to AH level before the ER/Guidance I will be buying, for the first time, protective puts for ER.

 

[angstrom]

The only affect I see the NHTSA report having is positive or flat. Flat if the finding is that there is nothing more Tesla could do. Positive if the NHTSA considers other manufacturers should be rated more poorly or given a timeframe to comply with meeting the bar Tesla has set.

 

[Jack6591]

Chrysler and the NHTSA

Jeep Grand Cherokee recall investigation closes, NHTSA finds no 'unreasonable' risk

Just one of those things that makes you say...Hmmmmmmmm.

 

[vgrinshpun]

Jeep Grand Cherokee recall investigation closes, NHTSA finds no 'unreasonable' risk

Just one of those things that makes you say...Hmmmmmmmm.

Thank you, Jack for this.

"Those vehicles performed at a rate similar to their peers. That is the keystone analysis as to whether something poses an unreasonable risk to safety," Strickland said.

This makes statements made by David Friedman even more significant: electric cars pose different risks, not more

Electric cars pose different risks, not more, U.S. regulator says

 

[vgrinshpun]

Jeep Grand Cherokee recall investigation closes, NHTSA finds no 'unreasonable' risk

Just one of those things that makes you say...Hmmmmmmmm.

Here is the link to the letter Chrysler sent to NHTSA in response to the request for a recall:


http://www-odi.nhtsa.dot.gov/acms/cs/jaxrs/download/doc/UCM440794/INRL-EA12005-57203P.pdf


Some of the Chrysler objections that are relevant for the NHTSA investigation of MS:

In this response, Chrysler Group will show:

• Most of the crashes identified by NHTSA's Office of Defects Investigation (ODI) as
relevant to its investigation were extremely severe crashes involving energy levels far in
excess of any reasonable expectation for fuel tank performance. Indeed, the rear impacts
in most of these crashes were so severe that any of the peer vehicles would also have
experienced fuel leakage. No vehicle or fuel system design can completely erase the
possibility of fuel leakage in severe collisions.

• The vast majority of the relevant crashes involving the Subject Vehicles occurred at
energy levels far in excess of those prescribed by the current version of FMVSS 301 - a
version that is more than twice as severe as the standard that was applicable to the
Subject Vehicles.

• The performance of the Subject Vehicles cannot be distinguished from the ODI-selected
peer vehicle set in any statistically meaningful way.

• Fire-related fatalities and injuries have occurred in all of the ODI-selected peer vehicles,
often at rates exceeding those exhibited by the Subject Vehicles. Under applicable law,
these data mean that ODI cannot establish that the Subject Vehicles contain a
performance defect that these other vehicles do not possess.

 

[Krugerrand]

Chrysler later agreed to recall 1.56 million of the Jeeps and install trailer hitches on them to help protect the gas tanks.

I wonder if it was one of *these* trailer hitches that the Model S ran over? :biggrin:

I also heard that to avoid your ICE from landing in your lap during a collision, attach a hay spear to the grill.

 

[kenliles]

I wonder if it was one of *these* trailer hitches that the Model S ran over? :biggrin:

hilarious

 

[Chickenlittle]

Chrysler later agreed to recall 1.56 million of the Jeeps and install trailer hitches on them to help protect the gas tanks.

I wonder if it was one of *these* trailer hitches that the Model S ran over? :biggrin:

I also heard that to avoid your ICE from landing in your lap during a collision, attach a hay spear to the grill.

Funny I thought your post attempt at humor really funny now that it's real

 

[vgrinshpun]

Chrysler later agreed to recall 1.56 million of the Jeeps and install trailer hitches on them to help protect the gas tanks.

I wonder if it was one of *these* trailer hitches that the Model S ran over? :biggrin:

Do not mean to spoil all the fun, but MS did not run over one of these hitches, it run over a ball mount. Hitch is a frame that is attached to a car, while ball mount is a much smaller part that is attached to the hitch with a pin.

 

[Chrisr400cc]

So NHTSA could tell Tesla to recall all Model S's and Tesla could refuse and win just like Jeep did.

 

[Vger]

I am also cautiously optimistic that the NTHSA will have real statisticians on staff that will be able to understand what the press could not-- just because something happens twice in two months does not make it a likely occurrence. The population of Model S's on the road has increased by almost 50% since the incidents and no further incidents. I think this is a clear example of "reasonable risk."

 

[Krugerrand]

Do not mean to spoil all the fun....

Pfft! Yes, you do.

 

[TSLA Siempre]

I've now reversed my previous position. I do feel like an all-clear by the NHTSA is baked into the stock price at this point.