Tesla no longer 'biggest US autormaker' after $12 billion value drop

Tesla lost its place as the biggest US cautomaker by

market capitalization on Thursday, handing over the crown to General

Motors (GM), after a slump in share prices erased more than 12 billion

US dollars of Tesla's value.

Around 1845 GMT, GM had a

market capitalization of 52.6 billion US dollars, about 1.9 billion

dollars more than the California-based electric car maker, which had

overtaken the Detroit-based auto manufacturer in April.

Tesla

had a big edge over GM in market value as recently as June 30, but

shares reacted poorly to Tesla's latest car delivery figures.

The CEO of the electric car giant Elon Musk announced on

Monday that Tesla would start producing its first mass-market Model 3

sedans on Friday, two weeks ahead of schedule, with the first deliveries

set for July 28. The Model 3, which targets the middle-class market

with a price of 35,000 US dollars, plays a crucial part in Tesla's

vision to bring electric cars to the mainstream.

However,

analysts were instead fixated on the second quarter delivery pace,

which came in at 22,000 vehicles, less than the 23,655 forecast.

Goldman Sachs, an Americanmultinationalfinance

company, slashed its six-month price target on Tesla shares to 180 US

dollars from 190 US dollars per share on Wednesday, warning that demand

for the company's established cars was "plateauing," pressuring profit

margins.

Moreover, Tesla's Model S once again fell

short of the top rating in a key crash test by the Insurance Institute

for Highway Safety, the agency announced Thursday.

Adding

to Tesla's woes, the company is facing a more crowded market after

Swedish rival Volvo announced Wednesday that it will phase out

production of conventional petrol-only cars from 2019, with all new

models to be either electric or hybrids.