NEW YORK, March 20, 2026, 11:48 AM EDT
Tesla shares lost 1.4% to $375.11 late Friday morning in New York, deepening a slide sparked by tougher U.S. regulatory scrutiny over its self-driving tech. The pressure lingered even as the National Highway Traffic Safety Administration turned down a broad recall request involving roughly 2.26 million vehicles. The stock had already tumbled 3.2% Thursday after the government escalated a separate probe into Full Self-Driving.
This shift is significant: investors increasingly view Tesla as an autonomy and AI play instead of just another car company, especially as the April 2 first-quarter deliveries report approaches. “The stock price is driven by narrative and future possibilities from AI ventures,” UBS analyst Joseph Spak pointed out this week. That dynamic turns every new regulation or delivery forecast into a major swing factor for the stock. MarketWatch
FSD is taking the spotlight here. On Thursday, NHTSA pushed its probe into 3.2 million Tesla cars up to an engineering analysis—just a step away from a possible recall—flagging that the camera-only setup could miss low-visibility hazards or delay driver alerts. Nine incidents, one fatal, are potentially linked to this flaw, the agency said. FSD, or Full Self-Driving, is Tesla’s advanced driver-assistance system, but it still expects human drivers to stay alert and step in when necessary.
Tesla countered with a European angle, noting it’s awaiting word from the Netherlands’ RDW by April 10 on whether its FSD can get the green light there. The company also said, “We are anticipating a possible EU-wide approval during the summer.” Reuters
Investors are getting a steady drip of expansion news from the company. Musk, for his part, floated the idea that Tesla could tape out its next-generation AI6 chip by December—using a mix of luck and AI, he wrote, “we might be able to tape out AI6 in December.” Meanwhile, other reports point to Tesla talking with Chinese suppliers for about $2.9 billion in solar-manufacturing gear, and laying groundwork for an energy-storage business in India that goes beyond vehicles. Reuters
Still, the risks are becoming harder to ignore. “Where’s the money coming from?” Baird analyst Ben Kallo asked Business Insider, as Tesla keeps piling on new chip, solar, and other projects, all on top of its ongoing expansion push. Barron’s has pegged the Terafab build-out at $30 billion to $45 billion. This is as Tesla targets $20 billion in equipment outlays this year, with positive free cash flow for 2026 looking uncertain. Business Insider
The pressure isn’t easing up. Over in China, Xiaomi has set the updated SU7’s price tag below the Model 3, touting more range and turning up the heat on Tesla in the world’s top EV market. For robotaxis, Waymo still holds the pole position in fully driverless rides, but both Uber and Nvidia are eyeing a 28-city launch starting in 2027.
Tesla shares slid against a backdrop of weakness in growth stocks. At 9:58 a.m. ET, the Nasdaq was off 1.17%. Consumer discretionary names tracked by the S&P 500 fell 1.2% as investors reworked their rate expectations and eyed volatile oil prices tied to the Iran war. None of that directly caused Tesla’s own set of company-specific troubles, but the broader mood left little incentive for buyers to wade in.
