• News
  • Guides
  • Reviews
  • Media
  • About
  • News
  • Guides
  • Reviews
  • Media
  • About
Sign up Now (For Free)

Sign up for our newsletter and receive the latest automotive news in your inbox!

Invalid email address
We promise not to spam you. You can unsubscribe at any time.
Thanks for subscribing!
News
Read Now
  • All News
  • Automakers
  • Automobiles
  • Auto Shows
  • Business
  • EVs & Environment
  • Guides
  • Lawsuits/Legal
  • Regulatory
  • Ride-Sharing
  • Safety & Recalls
  • Technology
Recent
  • Jeep Culture is a Real Thing
  • Porsche Cars North America Gets a New CEO
  • Canadian Union Approves New Contract with Ford
  • The Rearview Mirror: Birth of a Legendary Design
  • UAW Ups Pressure, Expands Strikes to Parts Depots
  • Ineos Begins Grenadier Production for North America
  • VinFast Focuses on Europe to Beat Chinese Rivals to Market
  • Honda Establishes Global Motorsports Organization
  • Bugatti Rimac Signs U.S. Distribution Pact with VW
  • Tentative Settlement Ends Ford Strike Threat in Canada
Editor’s Choice
    Reviews
    Read Now
    • All Reviews
      • Feeder
    • Classic Cars
    • Concept Cars
    • Convertibles
    • Coupes
    • Crossovers/CUVs
    • Diesel
    • Hot hatches
    • Hybrids
    • Luxury Vehicles
    • Minivans
    • Muscle Cars
    • Pickups
    • Sedans
    • Sports Cars
    • Super Cars
    • SUVs
    Recent Reviews
    • A Week With: 2024 Mazda CX-90 Turbo S Premium Plus
    • A Week With: 2024 Mercedes-AMG EQE SUV
    • A Week With: The 2024 BMW i7 xDrive60
    • A Week With: 2024 Alfa Romeo Tonale Veloce AWD
    • A Week With: 2023 Toyota Camry XSE Hybrid
    • A Week With: 2024 Subaru Impreza RS
    • A Week With: 2023 Chevrolet Colorado ZR2 Desert Boss
    • First Drive: 2024 Polestar 2
    • A Week With: 2024 Mercedes-Benz GLE 450 4Matic
    • A Week With: 2023 Mazda CX-50 Turbo
    Editor’s Choice
      Guides
      Car Warranty
      • Endurance Warranty Reviews
      • BMW Extended Warranty
      • Extended Warranty For Cars Over 100k Miles
      • Extended Car Warranty Cost
      • Subaru Extended Warranty
      • CarShield Reviews
      • CarShield Cost
      • Aftermarket Car Warranty
      • CARCHEX Warranty Reviews
      • Reputable Extended Car Warranty Companies
      • Used Car Warranty Companies
      • Best Car Warranty
      • Is CarShield A Scam?
      • Mercedes Extended Warranty
      • CarShield Plans
      Insurance
      • How To Identify A Car Insurance Company
      • Geico Mechanical Breakdown Insurance
      • How Far Back Does A Car Insurance Company Look
      • Mechanical Breakdown Insurance For Used Cars
      • State Farm Mechanical Breakdown Insurance
      • Mechanical Breakdown Insurance From Progressive
      • Dollar A Day Insurance
      • Auto Insurance For SSI Recipients
      • Car Insurance Rates After A Suspended License
      • Auto Insurance For Salvage Vehicles
      • Average Cost of Dodge Ram 1500 Car Insurance
      • Car Insurance Florida
      • Full Coverage Auto Insurance
      • GrubHub Insurance
      • Amazon Delivery Auto Insurance
      Shipping
      • Car Shipping Companies
      • uShip Reviews
      • Auto Shipping From California To Hawaii
      • Montway Auto Transport Reviews
      • Cheap Car Shipping
      • Easy Auto Ship Reviews
      • Auto Shipping Miami
      • Auto Shipping To Alaska
      • Car Shipping Cost
      • Auto Shipping Hawaii
      • Auto Shipping Puerto Rico
      • Sherpa Auto Transport Reviews
      • Auto Shipping Atlanta
      • Auto Shipping Boston
      • Auto Shipping. Chicago
      About
      • About Us
      • Contact Us
      • Terms of Use
      • Privacy Policy
      • Affiliate Disclosure
      • Sitemap
      TheDetroitBureau.com

      More than just “another” place to find news, reviews, spy shots, commentary, features, and guides about the auto industry. TheDetroitBureau doesn’t stop with the press releases or confuse a few lines of opinion with insightful, in-depth reporting.

      Contact Us

      Like what you see? Have some ideas for making The Detroit Bureau.com even better? Let us know, we’d love to hear your voice.

        Media
        Listen Now
        • Headlight News: All Episodes
        More from TheDetroitBureau
        • Guides
        • Latest News
        • Auto Reviews
        • Podcasts
        Headlight News

        TheDetroitBureau.com’s Headlight News offers a look at the past week’s top automotive news stories, as well as what’s coming up in the week ahead. Check out the week’s top story and our latest review…along with a dive into the past with this week in automotive history.

        home > news > Automobiles > A Good Week Gone Bad for Tesla

        A Good Week Gone Bad for Tesla

        Update: GM overtakes Tesla as EV maker's stock collapses.

        Paul A. Eisenstein
        Paul A. Eisenstein , Publisher & Editor-in-Chief
        July 06, 2017
        Tesla hoped for a big boost by announcing the production launch of the new Model 3.

        (This story has been updated to reflect the continuing plunge in Tesla stock on Wednesday.)

        What started out as a week full of fireworks for Tesla may be turning into a dud.

        The automaker’s high-flying stock suddenly has taken a nosedive since traders returned from the long Fourth of July holiday, falling 7% on Wednesday and, by midday Thursday dipping nearly another 5 percent. At around $310 per share by mid-afternoon, TSLA was not only off sharply from the record $383.45 set on June 23rd, but with a market capitalization of just under $51 billion. the value of Tesla had slipped behind that of General Motors for the first time in nearly three months.

        Insight!

        That’s clearly not what CEO Elon Musk had in mind when he tweeted on Sunday that Tesla was planning to start production of the eagerly awaited Model 3 on Friday. That’s the same day, he added, that Tesla would formally begin taking orders for the vehicle that is expected to transform the carmaker from a niche to mainstream player.

        (Tesla confirms plans to launch Model 3 sales, production this Friday. Click Here for more on that story.)

        But the Tesla skyrocket has suddenly run into a variety of headwinds. That includes some harsh reports by key analysts at Barclay’s, CFRA Research and Goldman Sach’s, the latter cutting its six-month price target to just $180 to $190, or less than half the automaker’s June peak.

        The Tesla Model S didn't fare well in the IIHS Small Overlap frontal crash test.

        “We remain sell rated on shares of TSLA where we see potential for downside as the Model 3 launch curve undershoots the company’s production targets and as margins(for the second half of 2017) likely disappoint,” Goldman’s David Tamberrino wrote in an investor note.

        Why would investors drive up Tesla stock in the month ahead of the Model 3 production launch, only to turn sour on it as the much-heralded event actually approached?

        It certainly didn’t help that Tesla delivered only 47,100 of the older Model S battery-sedans and Model X SUVs during the first half of 2017, on the low side of its 47,000 to 50,000-unit forecast.

        Tesla put the blame on production problems involving the new 100 kilowatt-hour battery pack used in its longest-range models, such as the Model S P100d, rather than weakening demand. But that gave small comfort to analysts and investors. Tesla has long suffered from quality and production snafus, notably with the Model X. Musk has promised to redouble efforts to deal with such issues, so the latest troubles only underscore concerns about the launch of the critical Model 3.

        Adding to Tesla’s headaches: the maker fell short in the latest series of crash tests by the Insurance Institute for Highway Safety. According to the IIHS, the Model S got only an “Acceptable” rating in the small overlap test, a simulation of one of the most common highway accidents – though the electric sedan did get top ratings in every other category.

        For his part, Tesla CEO Musk has stated that safety is a high priority for his company. Tesla tried to downplay the results of the latest test, stating that, “IIHS and dozens of other private industry groups around the world have methods and motivations that suit their own subjective purposes.”

        Tesla CEO Elon Musk has to prove the launch of the new Model 3 can come off smoothly.

        But the insurance group’s tests generally receive strong praise, even from manufacturers that perform poorly, and the addition of the small overlap test a few years ago led most makers to redesign vehicles to perform better.

        There are yet other issues that could be raising concerns about Tesla’s long-term performance. That includes Wednesday’s announcement by Swedish-based automaker Volvo that it will shift to an “all-electric” powertrain strategy with the launch of all new models after 2019.

        Tesla is finding itself facing a growing list of competitors, whether newcomers such as Lucid and Faraday Future, or more established manufacturers like Volvo, Ford, Nissan and General Motors – which launched its own mainstream, long-range battery car, the Chevrolet Bolt EV, last December. BMW has set up its own electric sub-brand, a strategy that Volkswagen and Mercedes-Benz are soon set to mimic.

        (Click Here for more on Volvo’s move to electrify its line-up.)

        Whether this week’s slump is a short-term aberration or the start of a longer, deeper slide for Tesla is far from certain. The imminent launch of the Model 3 is likely to be a major factor. With a starting price of $35,000, it is meant to shift the customer base from an environmentally friendly niche into a more mainstream segment. And Tesla is predicting it could sell as many as 400,000 of the small sedans next year, its overall volume jumping to 500,000 with the Models S and X included – a six-fold increase from its 2016 numbers.

        Among those still bullish on Tesla is Ben Kallo, an analyst with Baird, who saw the weak first-half numbers as a blip that actually is a “de-risking event” for Tesla. It puts problems with the 100 kWh batteries in the past, he told investors, so, going forward, “we expect shares to trade higher as investors are increasingly able to focus on the Model 3.”

        After the Model 3 was unveiled on March 31, 2016 Tesla quickly locked down more than 300,000 advance registrations, each with a $1,000 deposit. Some analysts believe the number is now closer to 500,000. If those translate into actual orders and Tesla can pull off the launch reasonably smoothly, the bulls see even more upside potential.

        “The stock could make new highs as Model 3 production ramps,” forecast Kallo.

        (Tesla autonomous vehicle chief leaves. Click Here for more on this latest in a series of high-profile defections.)

        How to Care for Your Car

        Cheap Car Warranty

        Editor's Choice

        Best Extended Car Warranty

        Editor's Choice
        Recently Published
        Jeep ducking on grille

        Jeep Culture is a Real Thing

        Yesterday
        Unifor auto talks team 2023

        Canadian Union Approves New Contract with Ford

        Yesterday

        The Rearview Mirror: Birth of a Legendary Design

        Sept. 23, 2023

        Leave a Reply Cancel reply

        Your email address will not be published. Required fields are marked *

        Share this article:
        © The Detroit Bureau 2023
        • Guides
        • Privacy Policy
        • Terms of Use
        • Affiliate Disclosure
        • Contact Us
        • Sitemap
        Follow Us: