Tesla Motors Inc. (NASDAQ:TSLA) woes in the luxury electric car space continue to elicit debate much to the concern of investors who bet big on the company in the wake of the unveiling of Model-D. CNBC’s Phil LeBeau reports that Tesla’s stock has sunk by 14% over the past seven trading session despite fundamentals in the industry remaining intact.
“That is the worst seven-day trading period ever for shares of Tesla. The fundamentals of this business have not changed at all; yes oil is a big factor here because people believe it is a play on gas prices,” said Mr. LeBeau.
The pounding that Tesla Motors Inc. (NASDAQ:TSLA) has been experiencing in the recent trading days has been attributed to the sickening drop in oil prices. Analysts believe that the demand for electric cars might be affected by low oil prices as customers make a push for fuel guzzlers instead of going green on Tesla Motors Inc. (NASDAQ:TSLA)’s expensive electric cars.
Demand for electric cars has been under scrutiny in the recent past while Tesla Motors Inc. (NASDAQ:TSLA)’s ability to enjoy the benefits of selling to mass market at the current price levels continue to be a key talking point. Uncertainty also continues to bite on whether Tesla will be able to deliver on time; the much awaited Model-X whose unveiling has constantly been pushed back much to the surprise of analysts in the auto industry.
LeBeau has played down suggestions that Tesla’s valuation has been pulled down because of the ongoing decline in oil prices maintaining the company is a pure tech play.
“The truth of the matter is this is a luxury car company; right now it is not a play on gas prices. Pure momentum at play here with shares of Tesla under pressure today,” said Mr. LeBeau.
The unveiling of Model-D was expected to give Tesla the much needed gas to surge in the market but the momentum soon cooled off especially on reports that other auto companies were in the process of unveiling their own electric cars.
Tesla Motors Inc. (NASDAQ:TSLA)’s investors should expect tough times heading into the future as more players continue to develop models that are expected to be a game changer.
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