TSLA Stock Gradually Getting Its Act Together
Tesla Motors Inc (NASDAQ:TSLA) is busy trying to meet its target deliveries as the year 2016 draws to a close. CEO Elon Musk has been busy with both SolarCity Corp (NASDAQ:SCTY) as well as SpaceX, and may well be on his way to meet Donald Trump this week. However, at least one problem seems to be solved at present among the company’s many problems. Tesla stock has been inching up gradually this month.
Tesla Motors Inc has settled a Norway lawsuit over the performance of its “Model S P85D.” As per the latest news, the company has reached out-of-court settlement with 126 Norwegian customers who claimed that their car’s performance did not match promises made in the firm’s marketing. Lawyers for the car owners and Tesla Motors Inc told the Oslo District Court in a joint letter they wanted to withdraw the case which had been due to start on Monday, a court spokeswoman said. (Source: “Tesla settles Norway lawsuit over car’s performance,” Reuters, December 12, 2016.)
According to the report, Norwegian business newspaper Dagens Naeringsliv said that Tesla had agreed to pay about $7,700 to each car owner or allow them to choose from alternative options, including car upgrades.
The company was sued in September this year, for falsely advertising the “Insane Mode” on its Model S P85D sedan. Customers in Norway said that their models marketed with an “insane mode” of acceleration didn’t go fast enough. Tesla had rejected the claims. (Source: “Tesla Sued by Norway Car Owners as Speed Not Insane Enough,” Bloomberg, September 21, 2016.)
Norway is among the world’s top markets for the Model S, due to the generous subsidies provided by the government. According to data from lobby group Road Traffic Information Council (OFV), the registration of new Tesla cars in Norway fell by 24% in the first 11 months of 2016, compared with 2015. This news does not appear to be good for Tesla stock.
Tesla Motors Inc is not new to lawsuits and negative publicity. TSLA stock has been volatile on account of such events in the past. Earlier it was the autopilot fatality and, most recently, it was SolarCity.
Lawsuits had been filed against Tesla over the Solar City merger, that alleged breach of fiduciary duties related to the proposed merger. The company had said that the lawsuits were “without merit.” Now that the shareholders of both companies have approved the merger, and the focus has shifted to manufacture solar shingles starting next year, these lawsuits are unlikely to hurt TSLA stock.
Right now, investors are eyeing the number of deliveries that Tesla makes this year, and whether it can deal with its production problems to successfully launch the “Model 3” next year. Tesla stock should soar on any good news on these fronts.