Key Takeaways
- Tesla shares remain in focus Tuesday morning after the EV maker settled a lawsuit relating to a 2018 autopilot car accident.
- The settled suit comes a few days after Tesla CEO Elon Musk said the electric car maker plans to unveil a self-driving robotaxi on Aug. 8.
- Tesla shares may find support near the lower trendline of a descending channel around $160, and resistance from the pattern’s upper trendline near $213.
Shares in electric vehicle (EV) maker Tesla (TSLA) remain in focus Tuesday morning after court documents revealed that the company has settled a wrongful death lawsuit relating to a 2018 autopilot car accident that killed Apple engineer Walter Huang after his vehicle veered off a highway near San Francisco.
The settlement comes just days before the closely followed case centering around the automaker’s driver assistant technology was scheduled to go to trial in a California Superior court, potentially saving Tesla from damming evidence and testimonies that could cause reputational damage and establish precedent in similar existing and future cases.
Huang’s family alleged the vehicle’s autopilot steered the Model X SUV he was driving into a highway barrier, focusing, in part, on safety and design defects in the company’s driver assistance systems. They also partially blamed Tesla’s autopilot promotional messaging, alleging that it suggested vehicles with the technology were safe to drive without drivers needing their hands on the steering wheel. Meanwhile, Tesla argued that Huang had misused the autopilot system because he was playing a video game and inattentive prior to the accident.
The settlement terms in the case were not disclosed at Tesla’s request, with attorneys for the EV pioneer arguing that other claimants may perceive the settlement amount as evidence of Tesla’s potential liability for losses, which could reduce the likelihood of the company reaching a settlement opportunity in future cases.
The settled suit comes days after Tesla CEO Elon Musk said the electric car maker plans to unveil a self-driving robotaxi on Aug. 8. Tesla shares gained 4.9% on Monday following Musk’s late-Friday announcement on the robotaxi.
“The last thing they would want right now is to have a public trial showing all of the problems with Full Self-Driving,” said Guidehouse Insights analyst Sam Abuelsamid, according to Reuters.
Tesla shares have oscillated within an orderly descending channel since July last year, apart from a bull trap fake-out above the pattern’s top trendline in December. During periods of weakness, monitor the $160 level, an area on the chart where the price may find support from the channel’s lower trendline. Amid a move back to the upside, keep an eye on the $213 region where sellers could emerge to book profits near the pattern’s top trendline.
The stock was down 0.5% at $172.14 in premarket trading Tuesday about three hours before the opening bell. Through Monday’s close, Telsa shares had lost 30% of their value since the beginning of the year.
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