The stock price of Tesla Motors Inc (NASDAQ:TSLA) fell hard this week. In the four-and-a-half trading days from Thursday, Jan. 8, through mid-afternoon on Wednesday, Jan. 14, TSLA plunged 13.25 percent. By contrast, the Dow fell only 1.59 percent during that time period, and NASDAQ fell less than 1 percent.
The biggest drop for TSLA occurred on Wednesday, Jan. 14, after CEO Elon Musk delivered disappointing news on Tuesday, saying that China sales were down and that he didn’t expect the company to be profitable until 2020. The stock plunged as low as 9 percent after hours Tuesday and opened on Wednesday 8.71 percent down. By mid-afternoon, TSLA had recovered only slightly, still hovering around 7 percent lower for the day.
China Sales Down
At the Detroit Auto Show on Tuesday, Musk said that sales for the fourth quarter of 2014 were significantly lower in China. He said the problem was due to Chinese customers’ misperceptions that the charging network is not sufficiently built out to drive long distances.
Tesla Won’t Be Profitable Until 2020
At the Show, Musk said that the company would become profitable after its lower-priced car, the Model 3, which is set to debut in 2017, goes into full production mode. Musk thinks that will happen by 2020. Meanwhile, Wall Street analysts had expected Tesla to become profitable in 2015. This mismatch in expectations is what sent the stock into a tailspin after hours on Tuesday.
Model X SUV is Coming
In better news, excitement about the new Model X SUV, expected to be available this summer, has been running high. At the Auto Show, Musk said that the entire year’s production run has already sold out.
Tesla Plans to be a High-Volume Seller
At the Show, Musk also said that the company would be selling “a few million” vehicles by 2025, and that his goal was to sell a high volume of Tesla vehicles, rather than aiming only at the niche luxury market. In 2014,