Tesla (TSLA) Bulls Dominate WallStreetBets Forum as Retail Investors Ignore NHTSA Investigation to Focus On the Upcoming AI Day

Submit
This is not investment advice. The author has no position in any of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.

Tesla (NASDAQ:TSLA), the world’s largest EV manufacturer and an oft-discussed stock among retail investors, is all the rage this week amid a couple of fast-paced developments.

The US National Highway Traffic Safety Administration (NHTSA) exploded on the financial sphere yesterday as its Office of Defects Investigation (ODI) initiated an evaluation of Tesla’s Autopilot system:

Should Elon Musk’s Political Leanings and Rants Against ESG Concerns Matter to Tesla Shareholders if He Is Still the Biggest Value Creator for the Company?

“ODI has opened a Preliminary Evaluation of the SAE Level 2 ADAS system (Autopilot) in the Model Year 2014-2021 Models Y, X, S, and 3. The investigation will assess the technologies and methods used to monitor, assist, and enforce the driver's engagement with the dynamic driving task during Autopilot operation.”

Bear in mind that Tesla’s semi-autonomous driving system, dubbed the Autopilot, has recently gone through a major overhaul, with the company abandoning the radar sensor in favor of eight cameras. While the change does bring cost benefits, some analysts argue that it would render the system more vulnerable to adverse weather conditions. Readers should note that the company continues to test LiDAR sensors for its Autopilot system, setting the stage for a possible incorporation at a later stage.

The NHTSA has identified 11 distinct incidents of concern related to crashes involving a Tesla vehicle. To make matters worse, six people were injured yesterday as a Tesla Model 3 crashed in a school’s car parking. It should be noted that it is as yet unclear whether the Autopilot was engaged during that particular harrowing episode. Interestingly, an aptly named website, Tesla Deaths, is now chronicling all fatal accidents involving a Tesla EV.

In another major bearish news that came out yesterday, the famed “Big Short” fund manager, Michael Burry, increased his bearish Tesla bets in Q2 by buying put options on 3.1 million additional shares. Burry now has put options on 1.1 million Tesla shares.

This brings us to the crux of the matter. None of these bearish developments seems to have left an indelible mark on retail investors. As an illustration, Tesla was the most discussed stock on the WallStreetBets Reddit forum over the past few hours, with bullish sentiment clearly taking the lead:

Tesla

The Prolific Short-seller Hindenburg Research Goes After Elon Musk’s Twitter Takeover Deal, Citing “Nosebleed” Leverage, Overvalued Offer Price, and “Undue Pressure” on Tesla Shares

Source

One major reason for this extraordinary resilience might be the upcoming Tesla AI Day, currently scheduled for the 19th of August 2021. The event is being interpreted as the second iteration of Tesla’s Autonomy Day. Moreover, the AI Day should bring some much-needed clarity when it comes to the functioning of the revamped Autopilot system and the associated Full Self-Driving (FSD) capability that Tesla currently retails for a monthly subscription fee.

Submit