Shares of Tesla Inc fell 2.5% in premarket trade Thursday, extending the earlier session’s sharp selloff, following the ratings from Insurance Institute for Highway Safety (IIHS), where the automaker’s Model S couldn’t get a top safety award.
After toppling 7.2% on Wednesday, the stock was on its way to open Thursday 17% below its June 23 record close of $383.45. The IIHS stated the Model S didn’t qualify for any award due to the fact that it only made a score in the small overlap front test.
The primary issue with the efficiency of the Tesla’s Model S was that the safety belt let the dummy’s torso move too far forward, enabling the dummy’s head to strike the steering wheel hard through the air bag, IIHS’s report said. Although Tesla made modifications to the safety belt in vehicles developed after January, when IIHS tested the customized Model S, the same problem occurred. The vehicles that did achieved awards were Ford Motor’s Lincoln Continental, Daimler’s Mercedes-Benz E-Class and Toyota Motor’s Avalon. Other vehicles that couldn’t get any award were General Motors’s Chevrolet Impala and the Ford Taurus.
To obtain the highest IIHS rating, automakers ought to include a frontal crash prevention system with automatic braking abilities to avoid a rear-end crash.
Tesla’s stock has rallied 53% year to this day through Wednesday, where as the S&P 500 has gained 8.7%.