Tesla Turning Point?

Sinking Shares Curtail Musk’s Dream

Tesla Motors CEO Elon Musk introduces the falcon wing door on the Model X electric sports-utility vehicles during a presentation in Fremont, California September 29, 2015. Tesla Motors delivered the first of its long-awaited Model X electric sports-utility vehicles on Tuesday, a product investors are counting on to make the pioneering company profitable after years of losses. REUTERS/Stephen Lam
Where next for Elon Musk?
  • Why it matters

    Why it matters

    Tesla’s sinking share price threatens to strip founder Elon Musk of the funding he needs for his other visionary projects.

  • Facts

    Facts

    • Tesla’s Model 3 sedan is designed to appeal to middle-income buyers and transform the company into a mass producer.
    • The company has encountered production problems with its new Model X SUV.
    • Tesla has been instrumental in bringing innovative ideas into the auto industry.
  • Audio

    Audio

  • Pdf

Tesla, the electric car company founded by Elon Musk, has shaken up the auto industry. He founded an automaker that not only stayed afloat, but earned a market valuation that lapped established competitors like Peugeot and Fiat Chrysler.

But right now that is changing. Tesla’s stock price declined by more than a third over the last month, marking a radical shift for the market darling.

There will always be price fluctuations. But a different danger lurks here: Investors are losing faith in the infallibility of the South African visionary.

Mr. Musk’s improbable successes with PayPal, Tesla and Space X long gave him a special aura and sent share prices soaring. Those prices enabled Mr. Musk to turn his visions of an electric car and his “giga factory” for batteries into reality.

But without this source of cheap financing, his plans could run into trouble, including in his core business.

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