Tesla shares go down after Elon Musk drops production of Long-Range Plaid+ Sedan
Investors’ hopes squashed for a relief rally after a decline extending its peak in late January to 34% with electric-car maker Tesla’s share falling as much as 2.7% in New York trading on Monday post-Elon Musk tweeting the company’s decision to drop a longer-range version of its high-performance Model S sedan. The chief executive officer, Jack Kirkhorn said there’s “no need” to offer the car because the shorter-range Plaid version “is just so good.”
Tesla listed the Plaid+ on its website as offering more than 520 miles (837 kilometres) of range. Dan Ives, equity research analyst and businessperson who has been on Wall Street for two decades covering the software and the broader technology sector said Plaid+ was expected to draw niche demand and that the global chip shortage has forced the company to make some tough choices with regard to production.
One other factor to cancel its production could be the availability of new kinds of batteries Tesla is developing. Tesla had shared its plan in September to build larger, energy-denser and more powerful 4680 cells but last month. Musk said those cells were probably 12 to 18 months away from volume production.
Tesla’s decision to cancel its upcoming Sedan has added to its latest string of negative news about its stock prices with its shares going 16% down this year compared with the 12% advance for the S&P 500 Index.