What happened
The stock of Tesla (TSLA +2.59%) is acting kind of funny this week. Yesterday, as the rest of the stock market roared on news that Pfizer has a coronavirus vaccine that's 90% effective, Tesla stock fell 2%.
Today, it's happening again. Twin reports out of Tesla fanboy website Electrek appear to be weighing on the shares. They dropped 6% in morning trading, and while the stock has pared those losses somewhat, it remained down a disheartening 2.8% at 12:15 p.m. EST on Tuesday.
Image source: Getty Images.
So what
So what's the bad news on Tesla this time? Two things:
First, Electrek reports that Tesla is responding to complaints from the National Highway Traffic Safety Administration about component failures that rendered some touchscreens in older-model Model S and Model X vehicles useless. Tesla is acknowledging that the agency has a point, and is offering extended warranties to owners to take care of the issue.
On the one hand, this implies added warranty expense for Tesla, which could ding profits. On the other hand, Tesla going the extra mile to take care of its customers isn't a bad thing for the company. To the contrary, this is something that would only improve customer loyalty, and thus is no good reason to sell Tesla stock.
The second item might be more serious. Over in Germany, says Electrek, quoting from Germany's Automobilwoche (Automobile Week), Tesla is having some difficulty obtaining permits to complete construction of its Gigafactory Berlin. The company is depending on this factory to support sales of its Model Y crossover in Europe, and delays in construction could throw a monkey wrench into that plan.
Now what
And yet, as Electrek notes, Tesla still anticipates having Gigafactory Berlin ready to go by July 2021, and Elon Musk is already getting personally involved in trying to straighten out the permits situation. Thus, this also seems to be a hiccup in the business, but one that will soon be remedied.
If I were invested in Tesla stock (and I'm not), I think I'd be much more worried about its irrationally exuberant 817 P/E ratio -- but not worried about these hiccups at all.
