Tesla Shares Drop 1.17% as Regulatory Scrutiny and Investor Jitters Push $17.93B Volume to Second in Market Activity

On August 21, 2025, Tesla (TSLA) closed with a 1.17% decline, trading at $321. Daily trading volume reached $17.93 billion, a 28% drop from the previous day, ranking second in market activity. Regulatory scrutiny and investor sentiment shifts are shaping the stock’s near-term trajectory.

The U.S. National Highway Traffic Safety Administration (NHTSA) launched an investigation into Tesla’s delayed submission of crash reports involving its advanced driver-assistance systems (ADAS) and Full Self-Driving (FSD) technology. Documents reveal that Tesla submitted incident reports months after crashes occurred, violating the 5-day reporting requirement. The probe follows a broader regulatory focus on Tesla’s autonomous systems, including a separate investigation into 2.4 million FSD-equipped vehicles linked to accidents in low-visibility conditions. Tesla attributed the delays to resolved internal data collection issues but faces scrutiny over unsubmitted reports and data accuracy.

Investor confidence in Tesla’s autonomous technology has waned amid escalating legal and governance risks. Lawsuits, including the $243 million Miami Autopilot crash verdict and the Morand v. Tesla case, highlight concerns over overpromising FSD capabilities. Political dynamics further complicate the outlook: While Trump’s 2024 election initially buoyed sentiment, Musk’s recent criticism of Trump’s budget policies has created uncertainty. These factors, combined with a 50% stock decline since 2024, underscore a fragile market perception of Tesla’s risk management.

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