Tesla stock declined during afternoon trade in Friday's stock market as a a federal jury in Miami, Fla., found the EV giant partly liable in the 2019 death of a pedestrian who was struck by a Tesla vehicle that was in Autopilot.
A jury of eight people decided Friday that Tesla was partly at fault in in the case, due to the use and marketing of its Autopilot technology. Tesla will have to pay a large portion of $329 million in punitive and compensatory damages, according to news reports.
The $200 million in punitive damages were only assessed vs. Tesla, plaintiffs' attorneys told CNBC. They expect the EV maker to pay their clients $242.5 million, which includes one-third of the compensatory damages.
Tesla plans to appeal.
The lawsuit in Florida was over the 2019 death of Naibel Benavides Leon. The jury trial began on July 14 in Miami.
The facts of the case are that George McGee was driving his Tesla Model S in April 2019 when the car crashed into a parked SUV at more than 50 miles per hour. Benavides Leon, who had been standing next to the vehicle, was killed and Dillon Angulo was injured. Before the crash, McGee had engaged the Autopilot system, which can steer, brake and accelerate the car on its own.
Federal regulators have opened multiple investigations into Tesla's driver-assistance systems, including Autopilot and full self-driving, FSD.
The verdict that Tesla was partially at fault in the 2019 crash comes as CEO Elon Musk and Tesla are looking to expand their robotaxi ride-hailing service across the U.S., touting the company's autonomous driving capabilities as the key to valuation for the EV giant.
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Earlier in July, Tesla released its vehicle safety report for the second quarter. According to Tesla's numbers, vehicles in which drivers used Autopilot technology recorded one crash for every 6.69 million miles driven. Tesla drivers who did not use Autopilot registered one crash for every 963,000 miles driven, according to the safety report.
The Tesla safety report compares these numbers to 2023 data from the National Highway Traffic Safety Administration, NHTSA, which shows that in the U.S. an automobile crash happens every 702,000 miles.
Critics have said the safety report is grossly misleading.
Tesla Stock Trend
TSLA shares dropped 1.8% to 302.63 during Friday's broad stock market sell-off. Shares sank 4.25% for the week.
Tesla stock fell 3.4% on Thursday as the stock market responded to Tesla officially "expanding" its ride-hailing service to the Bay Area. However, the Model Y vehicles have a "safety operator" in the driver's seat, making it little different than FSD that can be equipped in current Tesla models.
In Austin, Texas, the limited robotaxi ride-hailing service has a safety operator in the front passenger seat.
Last week, TSLA undercut its 50-day and 200-day moving averages as Musk warned of a "few rough quarters" ahead in the Q2 conference call.
Tesla stock is still in a new base with a traditional 367.71 buy point, according to MarketSurge chart analysis. That base is within a much-larger consolidation.
On Tuesday, RBC Capital Markets raised the firm's price target on TSLA to 325 from 319, writing that Tesla's valuation could far exceed current levels should it be successful on all of its goals. The analysts noted that regulatory hurdles remain for the company's robotaxi ride-hailing service and that high levels of used EV inventory along with the Biden-era EV tax credit going away should pressure the auto business for the next several quarters.
The stock rallied from late April to late May in part because Musk said he was backing away from politics and the Trump administration. Since then, Tesla stock has tumbled and rebounded according to news cycles — many generated by debate between Musk and Trump.
The stock initially soared after the robotaxi launch but TSLA is now down around 6% since the June 22 service release.
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As of Friday's close, Tesla stock was up 27% since the April 22 Q1 conference call, lifted by robotaxi bets. Shares are down about 25% for the year, and 38% below their all-time high of 488.54.
Tesla stock has a 21-day average true range of 3.97%. The ATR metric, available on IBD's MarketSurge charting tool, gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily stock market action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
Investors can keep tabs on the IBD Leaderboard watchlist, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
Tesla stock has a 55 Composite Rating out of a best-possible 99. The stock also has a 75 Relative Strength Rating and a 56 EPS Rating.
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