What happened

Tesla (NASDAQ:TSLA) shares underperformed the market last month by shedding 13.1% compared to a 3.6% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The slump added to a difficult period for shareholders, as the stock has lost ground over the last 12 months, compared to a double-digit rise in the broader market.

^SPX Chart

^SPX data by YCharts.

So what

Investors pushed Tesla's stock lower last month as Wall Street braced for potentially bad news in the electric-car manufacturer's second-quarter earnings report. The company is facing many challenges at the moment, including elevated costs overall, as well as bottlenecks and inefficiencies tied to its Model 3 production.  

A customer receives keys to his new car.

Image source: Getty Images.

Now what

On Aug. 1, Tesla eased many of investors' key fears on those topics. Model 3 demand was strong in the second quarter, the company revealed, and production rates climbed while profitability improved. CEO Elon Musk and his team believe the second half of the year will bring many more gains as its mass-market automobile becomes more widely available for test driving and production processes continue to improve. Tesla shareholders will be keeping a close eye on its cash balances over the next few quarters, though, for signs that the company may have to raise cash to buy it flexibility as it works toward its aggressive sales goals.