Tesla shares have been falling since Wednesday.
The stock closed on Friday at $US185, but flirted with $US180 during the trading day.
On Wednesday, shares traded above $US200, but dipped 8% by the end of the week.
The stock hit a trading peak of $US291 in September, 2014. It has been highly volatile since then, moving up and down based on news about the company’s ability to produce and sell its electric vehicles in the US and other markets, especially China.
Over the past six months, analysts who cover the stock have offered a wide range of price targets, ranging from a low of $US65 to a high of $US400, with a variety of other numbers in between. The tremendous run-up in share prices from 2013 to mid-2014 was driven by optimism about Tesla’s growth prospects.
But since late 2014, Tesla has shed billions in market cap as Wall Street has figured out that the company’s ongoing story is as much about building one car in one factory as it is about a startup trying to disrupt a 100-year-old-plus industry.
This is putting a lot of pressure on the company to deliver its next vehicle, the Model X SUV, on schedule. Deliveries are expected to begin in the third quarter, and beta-test versions of the car have been spotted on the highways of the Bay Area.
There have been reports this week that Tesla’s efforts to bolster its business in China have been disappointing, but the company has only been selling cars there since mid-2014. CEO Elon Musk has made moves to reorganise Tesla’s team there, but he has also said that Tesla can meet its 2015 sales and production goals in 2015 without a substantial contribution from China.
Musk is currently visiting China and said that over the next three years, Tesla will look to build cars there, rather than exporting them from the US.
This could be a complicated process for the Palo Alto-based automaker, as Western car companies must partner with local Chinese manufacturers in order to manufacture vehicles in the country.
Although the stock has been sliding, Tesla notched a victory recently when New Jersey Gov. Chris Christie signed a bill that will enable the company to resume direct sales to consumers in the state, bypassing the franchise dealer model that other car makers use.