US National Highway Traffic Safety Administration head David Strickland is stepping down after four years on the job, amidst a Tesla probe that investors have been watching carefully, reports Angela Greiling Keane at Bloomberg. His current deputy David Friedman will act as acting administrator when Strickland departs, though the exact date has not yet been announced.
“While several unresolved issues remain on David Strickland’s docket, including the Tesla Motors Inc (NASDAQ:TSLA). investigation, he would likely never find a moment where all open cases are resolved,” Kelley Blue Book analyst Karl Brauer told Bloomberg. “The agency has survived changes in leadership before, and it should survive this one without letting anything fall between the cracks.”
NHTSA investigating Tesla Model S fires
The NHTSA, which is a part of the Department of Transportation, opened an investigation into the Tesla Model S after three of them caught fire following minor accidents within a few months. The investigation doesn’t allege that a defect exists, and Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk insists that the car will be given a clean bill of health, but the agency is tasked with rooting out potential safety hazards before there is a serious problem. Strickland was previously involved in the probe into fires in Gm’s Chevrolet Volt, another electric car. In both cases the concern has centered on the design of the battery, which necessarily contains a lot more energy than a normal car battery.
Strickland also handled the probe into Toyota’s cars that were accelerating of their own accord, causing accidents, and backed the decision to force automakers to double fuel efficiency standards by 2025.
Tesla’s stock price dipped after probe, still recovering
Tesla Motors Inc (NASDAQ:TSLA)’s stock price fell on the news that an investigation had been opened, although even Musk was saying the price was too high at the time. Since then an investigation from the NHTSA’s German counterpart ruled that the Model S was safe, giving the investors more confidence that the NHTSA’s own ongoing investigation will reach a similar conclusion. Even though there has since been a lawsuit alleging that Tesla misled investors regarding how safe the Model S really is, stock prices have already rebounded from the news.
The fact that Tesla Motors Inc (NASDAQ:TSLA) can’t keep up with demand, and has plans to expand into Europe and Russia, probably has something to do with it.