Tesla (TSLA) Stock Tanks 3% as General Motors Announces Its Electric Vehicle Plans

On Mar 6, 2020 at 8:31 am UTC by Bhushan Akolkar · 3 min read
Tesla (TSLA) Stock Tanks 3% as General Motors Announces Its Electric Vehicle Plans
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Automobile giant Tesla could see competition growing as home-rival General Motors announces its all-electric vehicle roll-out starting next year. Tesla (TSLA) started falling on Thursday.

On Thursday, March 5, Tesla Inc (NASDAQ: TSLA) stock price tanked 3.33% after General Motors Company (NYSE: GM) announced its plans to roll out all-electric vehicles from the next year. On Wednesday, the Detroit-based car-maker provided unprecedented details of its upcoming plans as part of the “EV Day”.

Besides unveiling its upcoming products, GM said that it plans to pump $20 billion over the next five years on autonomous and all-electric vehicles. GM Chairman and CEO Mary Barra said:

“We thought it was time for people to understand that General Motors has a leadership position in electrification and we’re moving fast”.

TSLA Stock Price

The Tesla share which rose over 100 points earlier this week lost 3.33% on Thursday. During the last trading session, TSLA stock was at $724 with a market cap of $133 billion. Even at this price, Tesla’s year-to-date returns stand at over 70%.

At the moment of writing, in the premarket, Tesla (TSLA) stock lost 0.63% and is currently at $720.

Tesla has been dominating the EV vehicle space at this point. In just the last eight months, the TSLA stock had a mammoth run making it the second-largest automobile in the world. Today, Tesla is three times the size of General Motors as per its market cap. However, analysts are saying that Tesla should carefully watch out for its competitors. Wedbush analyst Daniel Ives wrote:

“We believe the event was a clear shot across the bow against (Tesla CEO Elon) Musk and Tesla which continue to lead the EV landscape by a clear margin”.

Addressing investors, Ives further added that GM’s plans are more aggressive in recent years. He said:

“Our thoughts for Tesla. GM, given its vast distribution and global customer base, must be taken seriously in this EV arms race”.

Chinese Customers Threaten to Boycott Tesla

Tesla finds itself in yet another trouble. Just in two months after starting its production at its Shanghai gigafactory, local Chinese customers have threatened to boycott the company.

A report from Nikkei Asian Review says that China’s Tesla Model 3 customers have complained of receiving older and slower chips in their cars. As a result, customers have threatened public litigation against Tesla for replacing new processing chips with the older ones.

Owners discovered this issue after receiving different part numbers on the control units than the one given on the information sheets. Analysts suggest that a number of customers in China have reported this thereby accusing Tesla of deceiving them. The angered Chinese customers have also threatened to boycott Tesla.

Meanwhile, Tesla has apologized for the confusion created. It assured that there is “no difference” in the user-safety and driver experience between the existing Model 3 and the ones made in China.

Business, Markets, News, Stocks, Technology
Bhushan Akolkar
Author: Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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