More Safety Concerns For Tesla

Tesla Inc (NYSE: TSLA) investors can’t seem to make it to Friday fast enough. A disastrous week for Tesla bulls got even worse Thursday when the Insurance Institute for Highway Safety contradicted Tesla’s claims that its Model S is the safest car in history.

An IIHS safety test revealed that the driver’s side seat belt lacked sufficient tension to protect a crash dummy’s head in a small overlap front collision. After the IIHS reported the issue to Tesla and the company said it had fixed the problem, a follow-up test yielded similar results.

The tests prompted the IIHS to rate the Model S’s safety profile as “Acceptable” rather than “Good,” its top safety level.

“If you’re looking for top-line safety, we believe there are other, better choices than the Model S,” IIHS chief research officer Dave Zuby said.

Related Link: Tesla Is Teetering, But A Technical Look At The Stock Paints Bullish Picture

Tesla defended its claims that its vehicles are the safest in history.

“While IIHS and dozens of other private industry groups around the world have methods and motivations that suit their own subjective purposes, the most objective and accurate independent testing of vehicle safety is currently done by the U.S. government, which found Model S and Model X to be the two cars with the lowest probability of injury of any cars that it has ever tested, making them the safest cars in history,” the company said in a statement.

With the first ever Model 3 set to roll off the assembly line on Friday, this week has been packed with disappointing news so far for Tesla bulls. On Monday, Tesla reported only 22,000 second-quarter deliveries, well short of consensus estimates of 24,200.

On Wednesday, Goldman Sachs lowered its price target for Tesla shares from $190 to $180, citing concerns over plateauing Model S and Model X demand and Tesla’s ability to hit its aggressive Model 3 production targets.

Tesla stock is now down 14.5 percent in the past five trading sessions and seen down over 3 percent just prior to publication Thursday.
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Image Credit: By ReubenGBrewer (Own work) [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons