Tesla App Concerns Haven't Short-Circuited Investor Optimism
Like its founder, Elon Musk, Tesla is adept at creating a media sensation. It has claimed the Tesla app can put users in direct communication with their cars anytime, anywhere.
However, the reality of this remote control feature fell short of expectations when the app unexpectedly connected with other users' cars - potentially leading to hazardous situations.
A Tesla user in Chongqing posted earlier this week that his Tesla app connected him with another car hundreds miles away in Hunan. Being able to apply the remote-control functions including unlocking, cooling and charging a far-remote car had the Chongqing user more than concerned.
Tesla apologized for its "rookie mistake" on social media and claimed it had corrected the technical problem which was caused by a maintenance worker putting in the wrong information for two similar car models.
But the official statement didn't calm user concerns and doubts. "There might be more hidden risks, since a maintenance worker can alter information and control users' autos," one netizen said.
It is not the first time that the Tesla app has presented technical "mistakes." Last month, another buyer found on his Tesla app that he had five cars - all in Europe. The user could access information about these vehicles and control them remotely.
Analysts said the crossed wires on the Tesla app might easily lead to information alternation on data settings when car owners aren't aware of changes. It is concerning that tampering might lead to safety issues, they said.
Remote Control App Driving Tesla Stocks
The Tesla app's high download rate in China has been driving Tesla's share price recently following a fall from $418.32 to $330.21 on Sept. 8 when the S&P index committee refused to add the stock to the S&P 500.
Tesla's stock rose 12.58% early Monday to $419.62 a share and continued rising Tuesday on the back of an optimistic company report from Goldman Sachs. Tesla's stock was last trading at $423.43 a share.
Tesla weekly app downloads worldwide have recently been up on a year-over-year basis. The most recent weekly rise was 20% compared with 2019. Tesla app downloads are primarily concentrated in the U.S. and China - with the annual growth being mainly driven by China, Goldman Sachs said in the report quoting data from Sense Tower.
The report suggested Tesla would beat third quarter delivery estimates of 145,000 vehicles. In the third quarter of last year the company delivered 97,000 vehicles. Goldman Sachs maintained its "neutral" rating and $295 price target.
Battery Day Becomes Investment Catalyst
Tesla's stock has risen more than 400% this year compared with gains of about 3% for the S&P 500 index. Another positive for its stock price is its Battery Day.
Elon Musk said he was "super excited" about the event. Analysts have said the event could be the next catalyst for Tesla's stock. Musk has been masterful at creating hype to attract investment money and, even as the company burned through years of losses, there was never a shortage of new investors and that has maintained analyst optimism.
Tesla is scheduled to hold Battery Day Sept. 22 - an event in which the company plans to showcase its battery capabilities, technological advances and the "magic" of producing a higher volume of higher efficiency vehicle components at lower prices.
Additionally, the company will likely unveil its development of "in-house driverless-car hardware" and "robo-taxis" - even though it has been four years since Musk made his first fully self-driving vehicle claims.
Tesla turned a profit of $104 million in the second quarter of 2020 despite COVID-19 pandemic shutdowns. As a result, Tesla has now been profitable for four consecutive quarters for the first time in company history.