Tesla Chief Executive Elon Musk. Photo: Reuters
Tesla Chief Executive Elon Musk. Photo: Reuters
A Tesla Model S plugged in at a vehicle Supercharging station. Photo: AP
A Tesla Model S plugged in at a vehicle Supercharging station. Photo: AP

NEW YORK – Anyone who bought Tesla stock after Elon Musk tweeted in August that he might take the company private at $420 (R6 200) a share has watched their quick gains vanish – and then some. 

After reaching a high of $387.46 on August 7, the stock on Tuesday plummeted as low as $275.50.

Today’s bad news

A report by Bloomberg News that the Department of Justice has opened a criminal investigation into Musk’s tweets. Tesla is now roughly $145, or 53 percent, below Musk’s longed-for $420 and has seen about $17 billion of market capitalisation wiped out.

Tesla’s stock price has dipped on worries – beyond those about Musk – about established luxury-car companies launching electric cars that could take a bite out of Tesla’s market share. 

Shares fell as much as 4.5 percent earlier this month when Mercedes-Benz announced its EQC crossover. UBS’s Hummel said he considered the E-Tron to be better than the EQC.

Monday brought Audi’s unveiling of its battery-powered crossover E-Tron – one of the several Tesla competitors that are expected as soon as 12 months from now – in a glitzy bash. The specifications did not impress everyone.

UBS analyst Patrick Hummel said the car failed to set new benchmarks in the premium electric vehicle segment, and underscored that “catching up with Tesla is more difficult than expected by many”.

“The electric powertrain is not a commodity yet and Tesla might be able to sustain its lead for longer,” Hummel wrote in a note to clients on Tuesday. He said that the E-Tron delivered about 30 miles to 50 miles less range than the Tesla Model X, despite having almost the same battery capacity. Acceleration is also significantly slower.

– BLOOMBERG