Tesla Motors Inc (NASDAQ:TSLA) shares have been falling through last month. Last week Tesla’s stock price marked a 52-week low. The shares had hit a high of $240 on the last day of 2015 though they have set a declining pattern this year.
Tesla’s share price is currently trading at low of $157.74, which is a huge decline in comparison to their 52-week high of $286.65. In just the last month, the shares have fallen by 26%. This has been attributed to late deliveries, increasing competition and questionable production capacity. All this is opposite of what Wall Street had projected.
Wall Street had anticipated a huge potential in Tesla and had projected the shares to reach a high of $400. Late last year, this story began to change as Tesla abandoned the launch of 2012 Model S sedan and prepared to introduce Model X SUV so that it can set the stage for 2017 debut of model 3 mass-market vehicle. Questions started to crop up about Tesla’s ability to build cars and ship them.
Tesla has faced a difficult time in making cars than it had been expected. Many traditional automakers have the capacity to introduce a vehicle and assemble 100,000 cars on a monthly basis. This has not been the case with Tesla.
Tesla has been struggling to build and deliver 50,000 cars a year. Though their manufacturing rate is somehow hard to pin down, but some analyst claims that it is lower than expected a quarter ago. With a low production rate, Tesla cannot reach its publicly declared goals.
Tesla has continued to bring innovation to the automotive industry. It has a self-driving Autopilot feature, which was rolled out last year. The future of self-driving cars appears to be far away into the future when considering their mass adoption. Thought this is not one of Tesla’s primary woes.
Tesla is facing stiff competition, which has become its primary concern. This is not something Wall Street ever anticipated. New ‘electric’ cars have begun entering the market. Some though not entirely electric have a higher probability of sufficing than Tesla’s.
Tesla has also of late engaged in a pack of downgrades, which has highlighted Tesla potential to create automobiles in comparison to other automakers. Wall Street had assumed that Tesla would produce cars just like other manufacturers making them more competitive. This is slowly seaming to not to be the case
Tesla is currently neither the supercar of the public nor what Wall Street had in mind.