(Reuters) - Shares of Tesla Inc fell for the third straight day on Thursday, after its Model S sedan failed to get the top score in some tests conducted by a U.S. safety group and a larger rival secured supplies to power its electric vehicle programme.
Tesla’s shares have fallen about 13 percent this week, wiping off nearly $8 billion from the company’s market capitalisation, following the carmaker’s lower-than-expected deliveries and rising competition in the electric car market.
Thursday’s 5 percent drop puts the stock on course for its worst weekly performance since February last year.
The steep fall also knocked the company off its perch as the most valuable U.S. carmaker, with General Motors reclaiming the spot on Thursday.
At current levels, GM has a market capitalisation of $52.71 billion (40.73 billion pounds), while Tesla was valued at about $51.8 billion.
Tesla on Monday reported lower-than-expected delivery numbers, citing a “severe” shortfall of new battery packs.
This was followed on Wednesday by Goldman Sachs cutting its six-month price target to $180 from $190.
Andrew Left of short seller Citron Research told CNBC in a phone interview that he thinks that is fair in the short term.
Meanwhile, global carmakers are racing to bolster their battery supplies.
On Thursday, Reuters reported that mining giant Glencore had signed a major deal to sell up to 20,000 tonnes of cobalt products to a Chinese firm, a move that in turn helps Volkswagen (VOWG_p.DE) secure car batteries for its shift to electric vehicles.
Zhejiang Geely Holding Group-owned [GEELY.UL] Volvo said on Wednesday all car models it launches after 2019 will be electric or hybrids.
In the tests conducted by the Insurance Institute for Highway Safety (IIHS), the seat belt in Tesla’s Model S was not effective and could lead to the driver’s head striking the steering wheel hard through the air bag.
Ford’s Lincoln Continental, the Mercedes-Benz E-Class and Toyota Motor Corp’s Avalon received the highest rating overall, the agency said on Thursday.
Tesla’s Model S received the highest rating in IIHS’s crash testing in every category except one, the small overlap front crash test, where it received the second-highest rating available, a Tesla spokesperson said in an email.
The company said the most objective and accurate independent vehicle safety test is done by the U.S. government, which found Model S and Model X to have the lowest probability of injury of any cars that it has ever tested.
The IIHS is a research arm of the insurance industry, and its crash tests are increasingly influential in guiding vehicle safety design.
Reporting by Arunima Banerjee and Narottam Medhora in Bengaluru; Editing by Shounak Dasgupta, Gopakumar Warrier and Sriraj Kalluvila