Why Did Tesla (TSLA) Stock Fall Friday?

Shares of Tesla (NASDAQ:TSLA) dipped over 1.3% through late afternoon trading on Friday. Significant daily moves from Tesla are hardly surprising at this point, but investors should still take a look at what might have caused the electric car company’s most recent decline.

Just last week, Tesla CEO Elon Musk lashed out at analysts on the company’s first quarter earnings call, saying: "Excuse me. Next. Boring, bonehead questions are not cool… Sorry. These questions are so dry. They're killing me." The stock sunk following these comments but had recovered for the most part until now.

Model 3

Tesla will supposedly begin to take orders for at least one new version of the Model 3 very soon, based on a Friday Tweet from Musk.

Tesla will enable orders end of next week for dual motor AWD & performance. Starting production of those in July. Air suspension prob next year.

— Elon Musk (@elonmusk) May 11, 2018

This latest proclamation comes after Tesla announced in early April that it produced a total of 34,494 vehicles during Q1, which represented a 40% surge from the fourth quarter. Tesla also noted at the time that it had produced 2,020 Model 3 vehicles within the previous seven days. Furthermore, the electric vehicle company once again reiterated its goal to produce 5,000 Model 3 units per week at some point during the second quarter.

Clearly, Musk providing a positive update on Tesla’s mass-market Model 3 production shouldn’t bring down the stock, but maybe investors have simply become numb to Musk’s promises. So let’s dive into some other possibilities as to why Tesla stock dipped.

Underground Tunnel

Musk's first Boring tunnel—an underground tunnel system that will send cars around cities at insanely fast speeds—is now near completion in Los Angeles. Musk and the Boring Company’s will also reportedly offer the public free demonstrations when it is officially completed within the next few months.

Once again, the updated of a non-Tesla related project shouldn’t adversely impact Tesla stock. With that said, it could be a case where Tesla investors want Musk to focus on his publicly traded company and not his side projects.

Another Crash

Investors have become all too familiar with fatal crashes involving Tesla vehicles. On Tuesday, two teenagers died in a Model S accident. Now, the National Transportation Safety Board is investigating the fatal incident, which marks the fourth active federal probe involving a Tesla vehicle.

Luckily, for Tesla and investors, the U.S. transportation-safety agency said its latest investigation will focus on the emergency response. The agency noted that it doesn’t expect Tesla’s Autopilot system will become a part of its investigation.

Bottom Line

Before Friday’s dip, Tesla stock had been down over 8.5% over the last 12 weeks on the back of heightened debt concerns and continued Model 3 production woes. Investors have also seen automotive industry powers General Motors (NYSE:GM) , Volkswagen (OTC:VLKAY) , and Ford (NYSE:F) all commit to their own electric vehicle futures. Therefore, daily declines might become more and more common until Tesla starts to really churn out electric vehicles.

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