Tesla's Auto Rivals Are No Match for Elon Musk's Own Blunders

(Bloomberg) -- Tesla makes a good car. Unfortunately for investors, Elon Musk's actions keep hurting the stock price.

Shares reversed gains to slump as much as 6.6 percent after the electric vehicle maker was said to face a U.S. criminal investigation for comments made by the chief executive officer. The stock had been trading higher Tuesday after getting votes of confidence for its technology from analysts this week. This comes after more than a month of unrelenting negative headlines and a subsequent precipitous drop of nearly $20 billion in the company's market value from peak to trough.

Monday brought Audi's unveiling of its battery-powered crossover E-Tron -- one of the several Tesla Inc. competitors that are expected as soon as 12 months from now -- in a glitzy bash. The specifications didn't impress everyone.

UBS analyst Patrick Hummel said the car failed to set new benchmarks in the premium electric vehicle segment, and underscored that “catching up with Tesla is more difficult than expected by many.”

“The electric powertrain is not a commodity yet and Tesla might be able to sustain its lead for longer,” Hummel wrote in a note to clients on Tuesday. He said that the E-Tron delivers about 30 miles to 50 miles less range than the Tesla Model X, despite having almost the same battery capacity. Acceleration is also significantly slower.

Tesla's stock price has dipped on worries -- beyond those about Musk -- about established luxury-car companies launching electric cars that could take a bite out of Tesla's market share. Shares fell as much as 4.5 percent earlier this month when Mercedes-Benz announced its EQC crossover. UBS's Hummel said he considered the E-Tron to be better than the EQC.

Bernstein analyst Toni Sacconaghi took a similar stance ahead of the E-Tron unveiling, noting that there was “no actual flood of competition coming” for Tesla, after tallying up every announced electric vehicle arriving in the U.S. between now and 2022.

“The mass-luxury Model 3 – which will account for 70 percent of Tesla's revenues within two years – faces no credible competition whatsoever until 2020,” Sacconaghi wrote.

The biggest metric for Tesla's performance as a company is its ability to produce its Model 3 sedan profitably and at a stable rate. Yet the rush of adverse news on the company is making it hard for investors to keep their eye on the target. Tesla's “fundamentals are strong headed into third-quarter deliveries, but we acknowledge the noise around the stock makes it challenging to invest on fundamentals,” Robert W. Baird & Co. analyst Ben Kallo wrote in a note after the latest headlines about the criminal probe.

For more on Tesla, check out the Decrypted podcast:

To contact the reporter on this story: Esha Dey in New York at edey@bloomberg.net

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Brad Olesen, Christiana Sciaudone

©2018 Bloomberg L.P.