Tesla Motors Inc (NASDAQ:TSLA) and SolarCity Corp (NASDAQ:SCTY) have had great successes with SolarCity Corp’s stock growing 100% every year since 2006. Just recently, Tesla Motors Inc announced a grand plan to construct a gigafactory in the state of Nevada before SolaCity Corp scored big in its quest to manufacture solar panels by securing a deal New York City government.
However, for the past 4 weeks, the two companies haven’t had a good run in Wall Street. Their stocks have tumbled to lose a combined $5 billion.
On September 4, the electric car maker was worth $35 billion with the stock trading at $286.04. On Friday, Tesla Motors Inc (NASDAQ:TSLA) was worth $4 billion less, coming at $31 billion. That’s a bad slump in just about 4 weeks. On the same Friday SolarCity Corp (NASDAQ:SCTY) was worth $5.7 billion, about $ billion lower than it was on September 12, when the company was worth $6.6 billion.
JP Morgan’s said in its recent analysis that they are treating Tesla Motors Inc (NASDAQ:TSLA) with great caution. They gave Tesla Motors Inc (NASDAQ:TSLA) a price target of $190 end of 2015 and said the company would produce 73,000 units, 27,000 less than the 100,000 projected by the company. In an analysis that covered GM and Ford, JP Morgan’s indicated that the company isn’t as healthy a stock in long term as the other two automakers. Other analysts who’ve joined in the chorus are Morgan Stanley and Goldman Sachs.
On Monday Tesla Motors Inc (NASDAQ:TSLA) closed at $250 a share while SolarCity Corp (NASDAQ:SCTY) closed at $61.
Even by winning big in Buffalo, New York for the construction of a $5 billion gigafactory, many analysts see the project as too big of a risk for Tesla Motors Inc (NASDAQ:TSLA). The company has been purchasing cheaply produced solar panels from China, but now is working on producing own panels. At the same time, there is another player in the market that’s joining New York State Exchange, and that’s Vivint Solar. That means competition.
This article has been written by Victor Ochieng.