Feature China: Barcroft Media via Getty Images
- Tesla shares pulled back Monday, swept up in contagion fears over the fallout of China's Evergrande property developer.
- Investors are concerned a $300 billion default at Evergrande will hurt the world's largest auto sales market.
- Separately, the WSJ reported a top US transportation regulator expressed safety concerns ahead of Tesla's pending rollout of a software upgrade.
- See more stories on Insider's business page.
Tesla shares declined Monday, dropping alongside Chinese electric vehicle makers on escalating worries that a potential debt default at a major Chinese property developer will hurt the world's second-largest economy.
Tesla shares fell 3.4% to $733.58 as trading got underway on Monday.
The stock also pulled back after the Wall Street Journal reported that a top US transportation regulator said teh company should address safety issues with its driver-assistance technology before rolling out a major software upgrade.
Shares of Tesla's rivals Li Auto, Nio, Xpeng also fell as Evergrande, China's second-largest real estate developer, rushed to avoid defaulting on a massive $300 billion in debt. Fears that Evergrande will damage the world's largest market for automobiles sales and the broader Chinese economy spilled into financial markets worldwide. Nio and Xpeng each fell 4% and Li Auto sank 6% after lowering its projection for third-quarter deliveries, citing a slower-than-expected recovery in supply for semiconductors.
Li now expects deliveries of about 24,500 vehicles compared with its previous outlook of 25,000 and 26,000 units.
In the US, the S&P 500 and the Dow Jones Industrial Average each dropped by more than 1%, with the Dow losing more than 400 points.
Meanwhile, the Wall Street Journal reported that the head of the National Transportation Safety Board said Tesla's move to expand so-called self-driving technology is premature.
Tesla is working on an upgrade of its self-driving technology that's expected to add a feature aimed at helping vehicles navigate cities. Tesla CEO Elon Musk last week said drivers will soon be able to request an enhanced version of its so-called "Full Self-Driving Capability."
"Basic safety issues have to be addressed before they're then expanding it to other city streets and other areas," Jennifer Homendy, the new head of the NTSB, said in an interview with WSJ published Sunday. She also expressed concern about how Tesla's software is tested on public roadways.
Tesla's urban-driving aid has only been available to a relatively small circle of employees and customers for testing purposes, the report said.
Tesla's technology is under scrutiny by the National Highway Traffic Safety Administration. The auto-safety regulator last month launched an investigation looking into crashes in which Teslas that were operating with the Autopilot feature ran into one or more parked emergency vehicles such as police cars.