Bad week jolts Tesla from top
After three months as America’s most valuable automaker, a bad week in an otherwise stellar year has knocked Tesla from the top perch.
Tesla’s growth remains stellar, with shares soaring close to 50 per cent this year, twice that at General Motors Co., which retook the spot Thursday. Ford Motor Co. has actually fallen in value this year.
But a trifecta of bad news in recent days, starting with a tweet from Tesla CEO Elon Musk, has delivered the worst weekly percentage decline for the electric automaker’s stock since early 2016.
Shares fell 6 per cent Thursday, pushing shares down almost 15 per cent for the week.
But because shares have grown so valuable this year, it was the biggest weekly decline in terms of pure value, period. Shares this week have given up more than $53 each. That translates to a market capitalization loss of more than $8.7 billion since Monday.
On Monday, Musk sent out tweet saying that the Palo Alto, Calif., company anticipates production of 20,000 Model 3 cars per month in December, which was below previous estimates. Tesla also said Monday that it delivered about 22,000 vehicles in the second quarter, bringing first-half deliveries to about 47,100. That’s at the low end of the company’s projections earlier this year of between 47,000 and 50,000 deliveries.
Then on Wednesday, the dynamics of the electric car market shifted when Volvo announced that by 2019, it would be producing only electric and hybrid vehicles, the first traditional automaker to make that leap.
On Thursday, one day after the Volvo announcement, the Insurance Institute for Highway Safety said that while Tesla’s Model S received an acceptable rating in its small overlap front test, it did not get the Top Safety Pick+ rating that the Lincoln Continental, Mercedes-Benz E-Class and Toyota Avalon received. Overlap front tests gauge the safety of those inside the car when the front driverside corner of a vehicle hits a tree or utility pole, or collides with another vehicle.
The IIHS said that the main issue with the Model S performance was that the safety belt allowed the torso of crash dummies to move too far forward, allowing the head to strike the steering wheel hard through the air bag.