How Will Tesla's Auto Pilot Safety Probe Affect The EV Maker And The Industry?

Tesla Inc TSLA came under regulatory scrutiny earlier this week over safety issues with respect to its vehicles' Autopilot.

Munster Calls For More Oversight Guidelines: The National Highway Traffic Safety Administration has begun a formal probe into Tesla's Autopilot due to 11 accidents that occurred between Tesla vehicles with the Autopilot mode on and emergency safety vehicles parked on the side of the road, Loup Funds' Gene Munster said in a note.

"More oversight guidelines for AV and advanced cruise control testing are needed to achieve the long-term goal to use machines to make our roads safer," the analyst said.

Related Link: Tesla Analyst Cuts Price Target By 17% On Potential Battery Delay

Autonomy May Take Longer to Come To Fruition: Given that Tesla is not the only company to be impacted by the investigation, tech companies will come under greater autonomy scrutiny, Munster said.

This will likely delay any mainstream autonomy availability, he added.

Against the backdrop, expectations for a full self-driving (FSD) vehicle to go public in 2025 appear to be optimistic.

"In the end, autonomy will likely take longer than most think to come to fruition, and almost certainly be more transformative than anyone can imagine," Munster said.

FSD to Face Near-term Hit: Tesla may now have to soften its marketing language around FSD, Munster said. This will have a near-term negative impact on FSD's upfront and subscription uptake, he added.

Long term, it shouldn't matter because eventually FSD will be "what its name implies, and will be a required feature for all carmakers," the analyst said.

Tesla shares were down 1.57% at $678.20 at publication time.