The weekend crash of a Tesla Model S added to the pessimism surrounding electric vehicle stocks on Monday.
Tesla Inc.’s stock fell to its lowest level in a month on Monday after a fiery fatal crash of a Model S over the weekend contributed to a general sense of doom surrounding electric vehicle stocks.
In New York, shares of Elon Musk’s automaker dropped as much as 6.5 percent. Though investigators are concentrating their efforts on the circumstances surrounding the accident, industry observers have expressed concern that EV startups may soon lose their competitive advantage as mass-market competitors such as Mercedes-Benz AG and Stellantis NV introduce their own models.
Stellantis announced last week that it would accelerate its transition to electric vehicles and that by mid-decade, battery-powered vehicles would account for more than a third of its European sales. Ferrari NV, the Italian supercar manufacturer, expects to join the race in 2025, while Mercedes-Benz has already unveiled the EQS, the company’s first all-electric vehicle for sale in the United States.
These announcements come on the heels of similar moves by General Motors Co., Ford Motor Co., and Volkswagen AG earlier this year.
Tesla’s lead in global battery-electric vehicle sales has shrunk by 100 basis points to 24 percent in 2020, according to a Bloomberg Intelligence study published on April 14. Meanwhile, “the VW Group’s market share increased to 9% from 4% in 2019, putting it on track to overtake Tesla in 2023 and demonstrating that existing automakers can rapidly gain market share once committed to drivetrain technology.”
In response to this context, Elon Musk’s Tesla stock fell as low as $691.80 in New York, its steepest intraday fall since March 18. Smaller EV companies, such as Nikola Corp., Workhorse Group Inc., Lordstown Motors Corp., and Fisker Inc., also fell.
Tesla’s downturn was precipitated by the late Saturday crash in Texas of a 2019 Model S, which burst into flames and killed both passengers. Local officials stated that it seemed as if “no one” was driving, as none of the victims were discovered in the driver’s seat. Tesla has previously faced criticism from federal regulators for fire hazards associated with its vehicle’s battery packs and for failing to do enough to prevent drivers from abusing the driver-assist function.
Tesla’s stock price has recently been hammered by conflicting Wall Street headlines. Though one of Cathie Wood’s Ark Investment Management funds sold some shares last week, Goldman Sachs suggested buying the stock as its outlook for electric vehicle sales penetration increased.
Tesla’s share price has been disappointing this year, with the company’s share price remaining virtually unchanged since the start of 2021, in stark contrast to 2020’s stunning rally. On April 26, the company is expected to release its first-quarter performance.
Tesla | Don’t forget to follow us on Twitter @njtimesofficial. To get latest updates
