Tesla Motors Loses on Both Stock Charts and Highways (TSLA)

Marred by supply chain challenges and longer-than-expected employee training periods, electric car manufacturer Tesla Motors (NASDAQ: TSLA) has a daunting task of competing against well known hybrid car brands manufactured by established auto-industry giants.

The California-based Tesla Motors is gearing up to open supercharger stations in its hometown on October 19. The 440-volt charging stations, planned throughout the country, will energize Tesla Model S with 300 miles worth of electricity in an hour.

Earlier in December 2011, the share price had a steep fall from $35.00 to $28.56, owing to a Morgan Stanley downgrade. With the departure of two senior executives, the share price touched a low of $22.79 in the month of January 2012, but rebounded sharply following the Tesla conference conducted to alleviate fears. The event coincided with a stock upgrade from several analysts including Wunderlich Securities and Goldman Sachs. A Seeking Alpha report published on February 19, 2012, went so far as to call Tesla the future Apple (NASDAQ: AAPL). With soaring gas prices, Tesla touched $38.01 on April 3, 2012.

A day later, the share price of Tesla saw a correction of 7.2% to $32.00 when 7.3 million shares of the company was sold as a block by Abu Dhabi National Energy (TAQA). In June 2012, the electric auto manufacturer handed over the keys to its first electric model S sedans. A month later, the share price, which ran up to $36.00 on anticipations of an exceptional performance in the second quarter of fiscal 2012, fell to $26.10 per share on reports of losses that widened to $106 million.

Tesla’s stock recovered back to $32.00 briefly in the month of September 2012, following the delivery of 50 cars and a boost to over-weight from Morgan Stanley. On September 26, 2012, Tesla filed a warning with SEC stating the possibility of a decline in sales and production. The stock plummeted to $27.54 on an above average volume. As of September 23, Tesla had produced only 255 of its luxury sedans and delivered 132 to its customers. Adding to the production and delivery problems, the United States Department of Energy has asked the company to begin paying back a $465 million loan. The company completed a second offering of stock recently to raise more cash.

The September 2012 sales report also showed that Tesla stood far behind its peers. While Tesla garnered a sale of 150 cars, General Motors’ Chevrolet Volt topped the chart with 2,851 units sold. Toyota’s Prius PHV sold 1,652 units in the same period. Tesla, however, did beat out the Ford Focus electric model, which only sold 59 units.

Hybrid and electric cars are the fastest growing segments of the auto industry with 351,703 hybrid and electric cars sold year to date. However, Tesla has yet to become a strong contender. Tesla Motors ended the day at $27.33 per share, down $0.31 or 1.1% on a volume of 1.47 million shares.

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Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.