Tesla shares drop 5% after NHTSA probes fatal Autopilot crash

Tesla shares fell more than 5% on Tuesday after the National Highway Traffic Safety Administration opened a special crash investigation following a deadly collision in Katy, Texas. The Tesla Model 3 struck a home, killing 76-year-old Martha Avila.

The NHTSA launched the probe as part of broader oversight of advanced driver-assistance systems. Harris County investigators reported that driver Michael Butler told them he had been using Tesla’s partially automated driving systems when the vehicle left its lane and struck the residence. The agency did not specify which vehicle systems it would examine or what data it would seek.

The stock drop weighed on the market. The S&P 500 fell about 1% and the Nasdaq Composite dropped roughly 1.5%. The Dow Jones Industrial Average traded near flat. Microsoft and Amazon rose, along with defensive consumer and healthcare names.

Tesla executives disputed parts of the driver’s account. Elon Musk wrote on X that “This crash makes no sense,” and added that Full Self-Driving “drives slowly through neighborhood streets and this was a high speed crash!” Ashok Elluswamy, Tesla’s vice president of Autopilot and AI, posted on X that the driver “manually overrode self-driving by pressing the accelerator all the way to 100% of the accel pedal in this residential area,” and that the vehicle reached 73 mph and the accelerator remained pressed after impact. The competing accounts have not been independently verified and are under investigation.

Tesla owner manuals state Full Self-Driving (Supervised) requires drivers to remain attentive, monitor the road and be prepared to take control at any time. The company has faced prior regulatory and legal scrutiny over Autopilot and FSD features.

UBS maintained a Neutral rating and a $364 price target on Tesla, and raised its second-quarter delivery forecast to 405,000 vehicles from 380,000. That forecast is slightly above the Visible Alpha consensus of 402,000 and sits within buyside expectations of 400,000 to 420,000. UBS also projected energy storage deployments of 13.4 gigawatt-hours for the quarter, a 40% increase year over year and 53% sequential growth.

The NHTSA investigation and local authorities continue to gather evidence as Tesla prepares to report second-quarter deliveries.