Elon Musk loses $24b in a day as Tesla shares plummet

Tesla’s shares dropped the most in four months after the carmaker blamed a disappointing deliveries report on shipment issues that increased the number of vehicles on their way to customers as the quarter ended.

The maker of Model 3 sedans and Model Y crossovers handed over 343,830 vehicles to customers in the last three months, short of the almost 358,000 total that analysts expected.

That sent Tesla’s stock tumbling 8.6 per cent Monday, its biggest one-day decline since June 3. It was also by far the worst performer in the S&P 500 Index, which notched its best day since July. The share tumble took a big chunk out of the fortune of founder Elon Musk, with his net worth dropping $US15.5 billion ($23.8 billion) on the day, according to the Bloomberg Billionaires’ Index. The world’s richest person is still worth $US223 billion.

Tesla has for years delivered big batches of vehicles toward the end of each quarter, a practice Musk has tried to move away from by localising production in all major regions. While the carmaker opened its first European factory in Germany in March, record shipping costs are still bedevilling the auto industry along with shortages of semiconductors and other components.

“As our production volumes continue to grow, it is becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost during these peak logistics weeks,” Tesla said in a statement. “In Q3, we began transitioning to a more even regional mix of vehicle builds each week, which led to an increase in cars in transit at the end of the quarter.”

Through the first nine months of the year, Tesla’s deliveries are up about 45 per cent, shy of the 50 per cent average annual growth rate the company has targeted for the next several years. Legacy automakers and new entrants alike are bringing more EVs to market to take on Tesla, which has led the charge for battery-powered cars since the Model S sedan debuted a decade ago.

“Naysayers on the Tesla story will point to the shortfall in 3Q as a demand issue,” Jeffrey Osborne, an analyst at Cowen & Co. with the equivalent of a holding rating on the shares, wrote in a report. “Monthly registrations and 4Q results will need to be monitored to better assess the situation.”

Tesla had said that its delivery count is conservative and that final numbers could vary by 0.5 per cent or more. The company produced 365,923 vehicles for the quarter.