Wall Street Watch Wednesday: Electric Cars Take Another Blow
Last week it was Smith Electric Vehicles calling off its IPO. On Tuesday it was Tesla Motors (TSLA) lowering its near-term outlook.
Demand for Tesla's breakthrough Model S plug-in sedan remains strong, but the automaker just hasn't been able to make the cars fast enough to keep up. Problems with supplier delays and its own learning curve as it ramps up production have Tesla to forecast only $400 million to $440 million in revenue this year. Its earlier guidance called for between $560 million and $600 million in sales.
Making matters worse, Tesla also announced a secondary stock offering on Tuesday morning.
It's been hard for the first wave of automakers in the plug-in electric car revolution. Nissan Leaf sales are trending well below where they were last year. General Motors (GM) has seen sales of the Chevy Volt pick up, but the automaker giant still had to institute another production hiatus to make sure that dealer showrooms aren't overrun with unsold cars.
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The recent spike in gas prices would seem to be the perfect catalyst to get drivers considering going electric -- or in the Volt's case, an electric car with a small gas-sipping engine to take over between charges -- but it's apparently not happening.
Tesla's problems seem to be production-related, but would the long waiting list of drivers with cash deposits on the Model S be long at all if Tesla were cranking out cars at a rate faster than the 77 a week it accomplished last week?
Other things worth watching
• It will be quiet on the earnings front in the morning, but a few companies will be active in after-hours trading by reporting fresh financials after Wednesday's market close. Worthington (WOR), Texas Industries (TXI), Progress Software (PRGS), and Landec (LNDC) will all report their latest quarterly results in the afternoon. Analysts see all but Progress Software posting year-over-year improvement on the bottom line.
• Activision Blizzard (ATVI) introduced Mists of Pandaria -- an expansion pack for its World of Warcraft online gaming franchise -- on Tuesday. The country's largest video game publisher will try to get back on track after seeing online players decline since peaking two years ago. Panda warriors may not be the ideal recipe for a rebound, but keep an eye out for any press releases from the company in the coming days to see how that debut is faring.
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Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Tesla Motors. Motley Fool newsletter services have recommended buying shares of Activision Blizzard, General Motors, Landec, and Tesla Motors. Motley Fool newsletter services have recommended creating a synthetic long position in Activision Blizzard.
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