Tesla falls from top car­maker spot

Stock value falls as pro­duc­tion hits low end of es­ti­mates

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM -

After three months as the na­tion’s most valu­able au­tomaker, a bad week in an oth­er­wise stel­lar year has knocked Tesla from the top perch.

Tesla’s growth re­mains strong, with shares ris­ing close to 50 per­cent this year, twice that at Gen­eral Mo­tors Co., which re­took the top 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 Chief Ex­ec­u­tive Of­fi­cer Elon Musk, has de­liv­ered the worst weekly per­cent­age de­cline for the elec­tric au­tomaker’s stock since early 2016.

Shares fell 5.6 per­cent Thurs­day, push­ing shares down al­most 15 per­cent 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 said in a tweet 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 a bit when Volvo an­nounced that by 2019, it would be pro­duc­ing only elec­tric and hy­brid ve­hi­cles, the first tra­di­tional au­tomaker to make that leap. Volvo, which is based in Swe­den but owned by Chi­nese firm Geely, will be­gin sell­ing five fully elec­tric cars be­tween 2019 and 2021. Three of them will be Volvo mod­els and two will be elec­tri­fied cars from Polestar, Volvo Cars’ per­for­mance car arm. It also plans to of­fer a range of hy­brids as op­tions, ex­pect­ing to sell 1 mil­lion elec­tri­fied cars by 2025.

Gen­eral Mo­tors is al­ready sell­ing the Chevro­let Bolt. Audi plans to in­tro­duce an elec­tric SUV next year. Ford will have one by 2020.

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 driver-side cor­ner of a ve­hi­cle hits a tree or util­ity pole, or col­lides with an­other ve­hi­cle.

The safety in­sti­tute said 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.

The in­sti­tute said Tesla mod­i­fied the ve­hi­cle and they retested it, but the same thing hap­pened again.

Tesla said Thurs­day that the car­maker’s rat­ing for the small over­lap front crash test was the se­cond-high­est rat­ing avail­able and that the com­pany re­ceived the high­est rat­ing in the rest of the safety in­sti­tute’s crash test­ing cat­e­gories.

A Tesla spokesman main­tained that “the most ob­jec­tive and ac­cu­rate in­de­pen­dent test­ing of ve­hi­cle safety is cur­rently done by the U.S. govern­ment, which found Model

S and Model X to be the two cars with the low­est prob­a­bil­ity of in­jury of any cars that it has ever tested.”

None­the­less on Wall Street, where Tesla’s shares have been un­stop­pable, in­vestors are tak­ing a breather.

Shares of Tesla Inc. slid $18.26 to close Thurs­day at $308.83.

AP/CHUCK BUR­TON

A Tesla car recharges at Cochran Com­mons shop­ping cen­ter in Char­lotte, N.C., in June. Tesla CEO Elon Musk said Mon­day that the com­pany ex­pects to reach pro­duc­tion of 20,000 Model 3 cars per month in De­cem­ber. That fig­ure is less than pre­vi­ous es­ti­mates.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.