GM most valuable U.S. carmaker as Tesla slides

After three months as the most valuable automaker in the U.S., 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 per cent and the electric car company passed General Motors and Ford in market cap. But shares have plunged almost 15 per cent this week, translating to lost market value of $8.7 billion US.

GM has regained the top spot with a value of $52.67 billion US 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 six per cent on Thursday alone.

On Monday, Musk sent out a tweet saying that the Palo Alto, California, 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 totalled about 47,100, at the low end of the company’s projections.

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, owned by Chinese firm Geely, will launch five fully electric cars between 2019 and 2021.

On 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 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.

Tesla’s shares are still up more than 40 per cent this year.