Tough times for Tesla
Tesla crash. © ABC News.
The storm clouds are gathering over Tesla. At the beginning of April, its stock tumbled below $260 US, wiping out all of its gains from the past year, while last June it was soaring at more than $380 US. Its market capitalization has dipped back below GM’s and is now at about the same level as Ford. What’s the reason? Bad news upon more bad news. To start, on the 23rd of March, a Model X on activated autopilot crashed into a traffic separation rail on a highway in Mountain View, California. The driver died and photos of the car in its sad state were seen around the world. Coming on the heels of the incident with the Uber car that killed a pedestrian in Tempe, Arizona, this didn’t help in building a positive image for the general public about autonomous driving. Next, production goals for the Model 3 still aren’t achieved. The goal for the end of 2017 was to produce 5,000 vehicles each week, but in fact only 2,400 Model 3s were delivered in the entirety of 2017! Today, production has reached 2,000 per week, but that’s a far cry from the kind of numbers that will allow them to deliver the 500,000 pre-orders in a reasonable timeframe. And lastly, Tesla had to organize the biggest vehicle recall in its history with 123,000 Model Ss that were produced prior to April 2016, which were experiencing problems with power steering system bolts that were rusting prematurely. Given this context, Elon Musk’s April Fools’ tweet, which joked, “we are sad to report that Tesla has gone completely and totally bankrupt,” didn’t amuse investors.