Shares of Tesla (NASDAQ: TSLA) were down in pre-market trading on Wednesday as the EV auto major could be facing more scrutiny from the U.S. auto safety regulators.
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The National Highway Traffic Safety Administration (NHTSA) has opened a probe into Tesla’s Model Y SUV after receiving two complaints that the car’s steering wheel could come off while being driven. The NHTSA said that its scrutiny will cover around 120,000 vehicles from the 2023 model year.
The automobile regulatory authority stated that in both cases, the company delivered the Model Y to its customers with a missing bolt that attaches the steering wheel to the steering column. While a friction fit maintained the connection between the steering wheel and the steering column, this fit separated when force was exerted while driving the SUVs.
The NHTSA pointed out that both these incidents occurred while the vehicles had low mileage on them.
Meanwhile, Berenberg analyst Adrian Yanoshik downgraded the stock to a Hold from a Buy with a price target of $210. Yanoshik’s price target implies an upside potential of 11.8% at current levels.
While the analyst is bullish on TSLA over the long term, the stock’s more than 70% rally year-to-date, has left Yanoshik sidelined on the stock. The analyst commented, “Tactical price changes reflect cost-leadership strategy: Tesla’s new plants offer multi-year opportunity in capital and labour efficiency.”
However, Yanoshik pointed out that over the near term, TSLA’s price cuts could come at a cost to its margins.
Besides Yanoshik, other analysts remain cautiously optimistic about TSLA stock with a Moderate Buy consensus rating based on 22 Buys, eight Holds and three Sells.
