Tesla Inc. (TSLA) shares opened at a 13-month low Wednesday on news that a fatal crash of one of its Model X vehicles in California last week has prompted an investigation from the U.S. National Transportation Board and a warning on liquidity from Moody's Investors Service.
Tesla said it has been unable to determine the cause of the crash outside the city of Mountain View, which killed the 38-year old driver and involved two other vehicles, but is working with authorities to recover the car's log.
"We were deeply saddened to learn that the driver of a Model X vehicle involved in an accident last Friday passed away," the company said in a blogpost. "Safety is at the core of everything we do and every decision we make, so the loss of a life in an accident involving a Tesla vehicle is difficult for all of us. Earlier this week, Tesla proactively reached out to the authorities to offer our assistance in investigating."
Tesla shares were marked 4% at the opening bell and changing hands at $2697.95 each, the lowest since February 2017 and a move that takes its year-to-date decline to around 14%.
Chipmaker and Action Alerts Plus holding Nvidia Corp. (NVDA) , which fell 7.76% yesterday after it said it suspended tests on self-driving cars following the death of a pedestrian in Arizona last week, was marked 0.16% to the upside at $225.88 each in pre-market trading.
Further pressure for Tesla came from Moody's Investors Service, which lowered its credit rating on the clean energy carmaker deeper into junk status and warned that it faces "liquidity pressures due to its large negative cash flow and the pending maturities of convertible bonds."
"Tesla's ratings reflect the significant shortfall in the production rate of the company's Model 3 electric vehicle," Moody's said. "Tesla's rating could be lowered further if there are shortfalls from its updated Model 3 production targets."
Moody's also pegged Tesla's Model 3 production rate at 2,500 per week for the quarter ending this month, a figure it sees rising to 5,000 per week by the end of June. Both tallies, however, fall far short of the company's forecast of 5,000 a week by the end of last year and 10,000 a week by the end of 2018.
TheStreet's Eric Johnsa wrote last week that Elon Musk's controversial $2.6 million pay deal could align the company's founder with the longer-term interests of the company's shareholders.
"If Tesla's top line, bottom line and stock price all see major improvements, then Musk will be richly rewarded. If they don't, then he gets nothing. But there are a few qualifiers. Perhaps the biggest one: Following the initial revenue and adjusted EBITDA milestones, EBITDA milestones appear much easier to achieve than revenue milestones," Johnsa wrote.
"With Tesla's 2018 revenue consensus standing at $19.3 billion and its adjusted EBITDA consensus at $1.7 billion, both revenue milestone #1 and EBITDA milestone #1 might be achieved by early 2019," he added. "But whereas analysts don't expect Tesla to reach revenue milestone #2 ($35 billion) until near the end of 2020 and revenue milestone #3 ($55 billion) until the end of 2022, EBITDA milestone #2 ($3 billion) is expected to be surpassed before the end of 2019, and EBITDA milestone #3 ($4.5 billion) before the end of 2020."