2017-07-06 11:21:03
Tesla Yields Place Atop U.S. Automakers as Stock Slumps

Tesla’s meteoric rise to become the nation’s most valuable automaker has ended, at least for now, after a reign of less than three months.

The electric-car maker has seen its shares fall by some 14 percent since Monday 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 on Wednesday that all its models would be hybrid or fully electric vehicles by 2019.

In early trading on Thursday, Tesla’s shares were down about 3 percent, to $318.36, giving it a market capitalization of $52.3 billion, according to Bloomberg. General Motors, the previous American leader, was back on top with a valuation of $52.7 billion.

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 $180 in November to more than twice that recently.

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 Mr. 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 Mr. 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 $1 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 $48 billion, surpassing the market capitalization of Ford Motor. The run continued and on April 10, the stock made another upward surge to $312.39.

That made Tesla more valuable than General Motors, a company that produced more than nine million vehicles and earned $9.4 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 $397 million, compared with a loss of $282 million in the same period a year earlier. The company’s revenue more than doubled, however, to $2.7 billion.