Tesla shares dropped for a second day as questions about a fatal Model X crash in California intensified the pressure on Elon Musk’s electric-car maker.
The company is working with authorities to retrieve data logs from the vehicle that crashed Friday, killing the driver, according to a Tesla blog post. Tesla didn’t say whether the vehicle’s Autopilot system was engaged but preemptively defended the driver-assist feature, which it’s developing as a precursor to autonomous driving.
March has been brutal for Tesla, with shares falling on all but five days and the company this week losing its perch to General Motors as the most valuable US automaker. The stock declined 7.7 per cent Wednesday to $257.78. Its unsecured bonds have hit all-time lows ahead of the release of first-quarter production results expected next week. The tone of the day was captured in analyst reports, with Cowen & Co. saying it’s time to “question Autopilot leadership” at Tesla and Sanford C. Bernstein focusing on the “fallacy of automation” to boost production.
The crash, which is being investigated by US authorities, adds to Chief Executive Officer Musk’s challenges including concerns that the electric-car maker won’t reach its production targets for the all-important Model 3 sedan. The accident also potentially raises fresh questions about self-driving features after a deadly Uber Technologies accident that happened days earlier and sent ripples across the broader autonomous-vehicle industry.
“We have in the past questioned Tesla’s promise that the current hardware will be able to eventually provide full self-driving capability,” Cowen analyst Jeffrey Osborne, who rates Tesla as “underperform,” wrote in a note. Given regulators’ reaction to the fatal Uber crash, “we see a large risk” that the self-driving equipment and capabilities Tesla has been touting to customers many not meet the eventual government standards, he wrote.
Tesla’s bonds dropped 3 cents on the dollar to 88 cents at 4:36 p.m. in New York, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority after reaching their lowest price ever earlier Wednesday.
Wei Huang, 38, died when his Tesla collided with a highway barrier on southbound Highway 101 near Mountain View and caught fire, according to the California Highway Patrol. The driver’s LinkedIn profile identifies him as a software engineer who joined Apple in November after more than a decade at Electronic Arts. Apple didn’t respond to a request for comment.
The US National Transportation Safety Board said in a tweet on Tuesday that it was sending investigators to examine issues raised by the accident, including the post-crash fire and steps needed to make the vehicle safe to remove from an accident scene.
Tesla’s battery packs are designed so that when a fire occurs, it spreads slowly so people have more time to exit or be removed from the car. “That appears to be what happened here as we understand there were no occupants still in the Model X by the time the fire could have presented a risk,” the company said in its blog post.
The collision caused extensive damage partly because a safety barrier meant to reduce the impact into a concrete lane divider had been removed or crushed in a prior accident without being replaced, according to Tesla. Tesla owners have driven the same highway stretch with Autopilot engaged about 85,000 times since the system was introduced, and no accidents have been reported that the company is aware of, the carmaker said.
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Read more:
Investigation into fatal Tesla crash in California begins
Tesla's reliance on Model 3 becoming more apparent
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Tesla’s approach with Autopilot has been to field a suite of driver-assistance features that are continuously improved via over-the-air software updates and help build toward more advanced autonomous capabilities. Tesla has said all cars now being made at its factory in Fremont, California, including the Model 3, have the hardware needed to one day be fully self-driving.
Reaching that capability will require extensive software validation and regulatory approvals. Mr Musk vowed to demonstrate a fully autonomous Los Angeles-to-New-York cross-country trip by the end of 2017, but that date has slipped.
Tesla's Autopilot team has suffered from leadership turnover over the past year and a half. Sterling Anderson left Tesla in December 2016 and was ultimately replaced by Chris Lattner, who was hired from Apple and lasted roughly six months at Tesla. In June 2017, Tesla hired Andrej Karpathy, a research scientist from OpenAI, another Mr Musk enterprise.
The safety board’s probe into the Mountain View crash is the second this year involving the company’s vehicles. Tesla’s approach to autonomy, which includes cameras and radar, is just one of the designs automakers are developing under the watchful eyes of federal and state regulators. Other carmakers are supplementing their systems with a laser-based system called lidar.
The NTSB is also investigating this month’s Uber accident in Tempe, Arizona, in which a Volvo XC90 equipped with the ride-hailing giant’s self-driving system failed to slow the vehicle as a 49-year-old woman crossed the street pushing a bicycle. The pedestrian died from the collision.
Moody’s Investors Service on Tuesday downgraded Tesla’s corporate family rating to B3, six levels into junk, and said its outlook on the company is negative. The credit rater cited “the significant shortfall in the production rate of Tesla’s Model 3” and liquidity pressures as two chief concerns.
“The negative outlook reflects the likelihood that Tesla will have to undertake a large, near-term capital raise in order to refund maturing obligations and avoid a liquidity short-fall,” Moody’s analysts wrote.
Model 3 deliveries have fallen short of Musk’s lofty goals since the company started building it in July. Bloomberg’s Model 3 tracker estimates the company may be making about 975 of the cars a week, well short of the target to build at a 2,500-unit rate by the end of this quarter.
An analyst at Citigroup wrote Tuesday that Tesla may be struggling to convert car shoppers into Model 3 buyers, while Robert W. Baird & Co said Monday the company might not achieve its weekly production goal by the end of March.
“This is the most negative sentiment I’ve seen in a while,” Ben Kallo, an analyst at Baird, said Tuesday. “It’s really about the Model 3 production and ramp up, and the shorts are piling in.”
COMPANY%20PROFILE
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'Gold'
Director:Anthony Hayes
Stars:Zaf Efron, Anthony Hayes
Rating:3/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
Company%20profile
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Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
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In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
What can you do?
Document everything immediately; including dates, times, locations and witnesses
Seek professional advice from a legal expert
You can report an incident to HR or an immediate supervisor
You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline
In criminal cases, you can contact the police for additional support
MATCH INFO
What: India v Afghanistan, first Test
When: Starts Thursday
Where: M Chinnaswamy Stadium, Bengalaru
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Honeymoonish
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Elie%20El%20Samaan%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3ENour%20Al%20Ghandour%2C%20Mahmoud%20Boushahri%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%3C%2Fp%3E%0A
The biog
Name: Salem Alkarbi
Age: 32
Favourite Al Wasl player: Alexandre Oliveira
First started supporting Al Wasl: 7
Biggest rival: Al Nasr
RESULT
Manchester United 1 Brighton and Hove Albion 0
Man United: Dunk (66' og)
Man of the Match: Shane Duffy (Brighton)
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
