Tesla has fallen 10% since the NHTSA initiated a probe of its autopilot systems, but Goldman is sticking to its ‘buy’ rating and says the investigation could last years

• Tesla has fallen as much as 10% since the NTHSA launched a probe into accidents allegedly involving its auto-pilot software.
• But Goldman Sachs reiterated its "Buy" rating and $875 price target for Tesla in a Monday note.
• Goldman thinks the NTHSA probe might take multiple years to resolve.
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Shares of Tesla have dropped as much as 10% since the NHTSA launched a probe into accidents allegedly involving its auto-pilot software on Monday.

The investigation will look into an estimated 765,000 Tesla vehicles, spanning across its entire model lineup. The agency identified 11 crashes involving Tesla vehicles and first-responder vehicles that were parked on the side of the road.

But Goldman Sachs isn't fazed by the investigation, with the bank reiterating its "Buy" rating and $875 price target in a note on Monday, representing potential upside of 28% from Monday's close.

Goldman believes the NHTSA probe "could take some time" based on previous investigations into the Takata airbag recalls, the sudden unintended acceleration of Tesla's, and Ford's PowerShift transmission. "Past investigations have taken many months or even multiple years to resolve," Goldman said.

And if an issue is ultimately found by the NHTSA regarding Tesla's auto-pilot software, an over-the-air update could help resolve the issue rather than an expensive physical recall of its vehicles, Goldman argued. That's what Tesla did earlier this year when it pushed a software update to fix safety issues with nearly 300,000 Model 3 and Y vehicles in China.

Another solution to the NHTSA probe could be for Tesla to include an enhanced monitoring system to ensure driver compliance with its terms of use, the note said. "Importantly, we note that Tesla is already working on a more robust driver monitoring system that leverages in-car cameras for eye tracking," Goldman said.

All in all, the bank feels that the recent sell-off in Tesla is a buy-the-dip opportunity, especially with its AI day unfolding later this week.