Tesla Motors shares plunged Wednesday after the electric car maker 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 36 cents to 4 cents, largely on higher research and selling, general and administrative expenses expected in the final quarter of this year.
The companys 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 from Tesla the zero emission vehicle credits required by regulators in California and other states.
The Palo Alto, Calif., automaker said Tuesday that 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.
Tesla is spending heavily to develop the Model X crossover, its second model. It is expected to go on sale late next year. It also is working on a third-generation electric vehicle, which would be a mass-market car expected to sell in the hundreds of thousands.