Doubt over Musk’s plan sees Tesla shares fall

TESLA shares fell to their lowest level in three months yesterday as fresh doubts emerged about Elon Musk’s ambitious plan to take the electric car maker private.

Multiple Wall Street analysts slashed their estimates of the company’s value, warning that Mr Musk’s claim to have secured a buyout appeared increasingly unlikely.

Meanwhile, it emerged that Saudi Arabia’s giant investment fund was considering investing in a rival electric car firm. The Gulf state’s sovereign wealth fund, which Mr Musk is relying on to help finance taking Tesla private, is reportedly considering putting as much as $1bn (£780m) into Lucid Motors, a California car maker involving several ex-tesla engineers.

Mr Musk sent Tesla shares soaring two weeks ago when he announced on Twitter that he had “funding secured” for a deal to take the loss-making company private at $420 a share.

However, it has since emerged that any deal is far from guaranteed.

Tesla shares fell as low as $288 in early trading yesterday, down 5pc. Shares later recovered their losses but fell again in late trading after Musk was forced to deny Tesla was at risk of bankruptcy. A survey from the Original Equipment Suppliers Association revealed that 18 of 22 suppliers believe the car maker is a financial risk to their companies and some said Tesla has requested price cuts or rebates on equipment. Several have lodged legal claims seeking unpaid compensation.

“We are definitely not going bankrupt,” Mr Musk told the Wall Street Journal.