American automaker Tesla (NASDAQ: TSLA) had positive news for investors and customers on Sunday night, revealing that its Model 3 sedan had passed National Highway Traffic Safety Administration (NHTSA) testing with a perfect score.
While this news could create positive traction in the market this week, it could also be offset by Musk’s recent Tweets about the SEC and the negative reaction received from investors.
Tesla Model 3 Passes Major Hurdle for Production
Tesla claims that they designed the Model 3 to be the “safest car ever built.” Now that the vehicle has passed through NHTSA testing, it looks like the engineers have met their target.
In a Tesla corporate blog post, it was revealed that the Model 3 had passed through crash tests designed to “calculate the likelihood of serious bodily injury for front, side, and rollover crashes.” Tests carried out by the NHTSA found that “occupants are less likely to get seriously hurt in these types of crashes when in a Model 3 than in any other car.”
This puts three different Tesla models at the top of the NHTSA’s list. Both the Model S and Model X held previous records.
This is a major milestone for Tesla and it will significantly improve brand appeal, particularly for individuals and families who are looking for safer ways to commute or travel over long distances.
This news could create consumer and investor goodwill, but the total positive impact could be offset by a recent Tweet made by Elon Musk.
Musk Mocks the SEC After Receiving $20M Fine
Musk and Tesla recently reached a settlement with the SEC regarding Musk’s previous misleading Tweets about taking the company private. Musk, a frequent user of Twitter, later went on to mock the SEC, referring to the agency as the “Shortseller Enrichment Commission”.
While it’s stock had some positive traction last week when it was announced the company would get a new Chairman and board member, the latest Tweet made on October 5 sent stock down -7.05%.
Investors took to Twitter to urge Musk to stay off the platform and focus on business. Twitter users complained that Musk’s musings have been hurting long-term investors.
Elon Musk Would Be Better to Focus on What He Does Best
As part of a settlement deal with the SEC, Tesla agreed to limit Musk’s use of social media for company related topics. This is sorely needed if the company wants to regain the confidence of investors.
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