Tesla's meteoric rise to become the nation's most valuable auto maker has ended, at least for now, after a reign of less than three months.
The electric-car maker has seen its shares fall by almost 20 per cent since June 22, a fall that has seen its market cap drop by about $US12 billion 9$15.8 billion). On Thursday, Tesla's shares finished 5.6 per cent lower $US308.83, giving the company a market capitalisation of around $US51 billion ($67.2 billion), according to Bloomberg. General Motors, the previous US leader, was back on top with a valuation of $US52.7 billion.
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Tesla Model 3 approved for production
Tesla's Model 3 sedan passes regulatory requirements for production two weeks ahead of schedule.
The slide accelerated this week after the company reported that problems with battery manufacturing in the first half of the year had hindered output of its existing line of luxury cars, just days before it begins assembly of its first mass-market offering, the Model 3.
The company's chief executive, Elon Musk, also offered a production timetable for the Model 3 that lagged behind promises made last year. And Volvo, though a small player on the world automotive stage, stole some of Tesla's thunder by announcing Wednesday that all its models would be hybrid or fully electric vehicles by 2019.
The slump in Tesla's share price at least temporarily halts a remarkable surge for the company, in which its stock rose from a little over $US180 in November to more than twice that recently.
Wanted to say thanks to all that own or ordered a Tesla. It matters to us that you took a risk on a new car company. We won't forget.
— Elon Musk (@elonmusk) July 3, 2017
A year ago, Tesla stock was shaken by news that an owner of a Model S electric sedan was killed when his car, operating in the company's self-driving mode known as autopilot, failed to see a tractor-trailer crossing a highway in Florida.
The crash raised questions about the reliability of the technology and whether Tesla had overstated its ability in its marketing and even in issuing the name autopilot. Federal agencies opened investigations, including one to determine if there was a safety defect in the autopilot mode.
Even when Musk laid out an updated Tesla "master plan", with a pledge to expand beyond electric cars into battery-powered pickups, semitrailer trucks and buses, and to equip them with advanced self-driving systems, the stock remained at about the same level.
But this year, investors began focusing on the introduction of the Model 3 and Musk's confident prediction that Tesla would be able to increase sales fivefold, to more than 500,000 cars a year, by 2018.
Weeks later, Tesla raised $US1 billion in stock and debt offerings to bolster its coffers in advance of the Model 3 introduction.
April brought more good news: A strong jump in vehicle production in the first quarter, and a new surge in the stock price pushed Tesla's market value to $US48 billion, surpassing the market capitalisation of Ford Motor Co. The run continued and on April 10, the stock made another upward surge to $US312.39.
That made Tesla more valuable than GM, a company that produced more than 9 million vehicles and earned $US9.4 billion in 2016. Tesla, by comparison, produced about 85,000 cars last year, and it reported losses in most of the last several quarters. In the first quarter of this year, it lost $US397 million, compared with a loss of $US282 million in the same period a year earlier. The company's revenue more than doubled, however, to $US2.7 billion.
The New York Times