Shares of Tesla Motors plunged Wednesday after the maker of electric cars said a battery shortage was limiting sales and that it is spending heavily on research and development to bring new models to market.
Shares of the automaker dropped about 15 percent, or $25.65, to $151.16. Tesla shares have been on a run for most of the year, rising about 400 percent before this reversal.
Some analysts have cut their price targets for the company and have told investors to sell the shares.
“We do not see a major potential near-term upside catalyst for the shares,” said Efraim Levy, an analyst at S&P Capital IQ, who has issued a sell recommendation.
He cut his target price by $10, to $140. Levy also slashed his estimate for 2013 full-year earnings per share from $0.36, to $0.04, largely on higher research and selling, general and administrative expenses expected in the final quarter of this year.
The company’s outlook was also hurt by a sudden plunge in the sale of what previously had been lucrative environmental credits to other automakers. The sale of such credits reached just $10 million in the third quarter, a fraction of the $51 million in the second quarter and $68 million in the first quarter.
Other automakers have increased their sales of rechargeable cars, lessening their need to purchase the zero emission vehicle credits required by regulators in California and other states from Tesla.
The Palo Alto, Calif., automaker said Tuesday it posted a loss of $38.5 million, or 32 cents per share, in the third quarter. That compares with a loss of $110.8 million, or $1.05 per share, in the same period a year earlier. Now that it is delivering cars, revenue grew to $431 million from just $50.1 million a year earlier.
“On a positive note, revenues and operating cash flows exceeded our forecasts and we see Tesla expanding production capacity and expanding globally,” Levy said.
