Tesla falls to No. 2 U.S. car­maker

Bad week sinks shares and puts its worth be­hind GM, again.

The Denver Post - - BUSINESS - By The As­so­ci­ated Press Chuck Bur­ton, The As­so­ci­ated Press

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.

Over the first six months of the year, Tesla shares gained more than 50 per­cent and the elec­tric car com­pany passed Gen­eral Mo­tors and Ford in mar­ket cap. But shares have plunged al­most 15 per­cent this week, trans­lat­ing to lost mar­ket value of $8.7 bil­lion.

GM has re­gained the top spot with a value of $52.67 bil­lion com­pared with $50.74 bil­lion for Tesla.

Tesla has been hit by a tri­fecta of bad news, start­ing with a tweet from Tesla CEO Elon Musk. Shares are on track for their worst weekly per­cent­age de­cline since early 2016 — they fell nearly 6 per­cent Thurs­day alone.

On Mon­day, Musk tweeted 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 first-half de­liv­er­ies of the Model S sedan and Model X SUV to­taled about 47,100, at the low end of the com­pany’s pro­jec­tions.

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 veOn hi­cles, the first tra­di­tional au­tomaker to make that leap. Volvo, owned by Chi­nese firm Geely, will launch 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.

Gen­eral Mo­tors is al­ready sell­ing the Chevro­let Bolt, and Audi plans to in­tro­duce an elec­tric SUV next year.

Thurs­day, 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 EClass 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 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. IIHS 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 sec­ond­high­est rat­ing avail­able and that the com­pany re­ceived the high­est rat­ing in the rest of IIHS’ crash test­ing cat­e­gories. A Tesla spokesper­son 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.”

Tesla’s gains this year are still noteworthy. The shares are still up more than 40 per­cent. GM shares gained about 2 per­cent in the same pe­riod, while Ford’s have de­clined.

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