US Justice Department Levies $30M Fine to Tesla’s Solar City

TeslaThe stocks of electric vehicle manufacturing “Tesla Inc” (NASDAQ: TSLA) continues to remain bullish until mid-September after the successful launch of the Model 3 car aimed at the mass market.

After recording a 12-month high figure of $389.61, the stocks of Tesla continue to decline. The shares in the previous week fell 7.6% and closed at $350.63. Investors are under a lot of stress and want Tesla to increase its vehicle manufacturing speed.

The solar venture initiated by Tesla has some adverse developments which are discussed below. It is expected that the stocks of this electric manufacturing company would remain bearish for the short term.

The US Justice Department on last Friday announced that SolarCity which is a subsidiary of Tesla to pay a sum of $29.50 million to settle all the allegations that it has inflated solar panel installation costs for receiving a large number of payments.

The claims were a part of the expired stimulus program that US government runs for promoting the usage of renewable energy. According to the Justice Department, the settlement made by Tesla is not an admission of guilt.

US Government has been countersued by Tesla claiming that the former had owed money to Tesla based on the appraisal done by investors and independent surveyors. The company would withdraw its plea after the out of court settlement. Still, the company’s approval for dishing out $30 million is not going well with the investors.

SolarCity

Daimler in a press release stated that it is going to spend $1 billion for the manufacture of electric automobiles under the brand name of Mercedes Benz. All the production would be carried out in Alabama at Daimler’s factory. Hence, Daimler’s electric sports vehicle would be competing against the Model X of Tesla on home turf. Recently, Euro green car was rolled out, and Mercedes also introduced an electric hatchback at the auto show in Frankfurt.

Jefferies, the well-known investment research firm, is of the opinion that Tesla will most probably continue to lose money until 2020. It has also pointed out that manufacture of the battery is a low margin business because of the material costs inflation involved in it.

The analysts at this research firm speculate Tesla to end the year 2019 with a net loss of $3.26 per share. Jeffries has curtailed the stocks based on the headwinds faced by Tesla, and they have given the price target of $280. Hence, we expect the stock prices to decline further in the coming period.

Tesla Stock Price Sep 27th 2017

Tesla Stock Price Sep 27th, 2017

Tesla’s stocks have broken the support level at 367. In addition to this, the RSI indicator has crossed below the reading of 50. The downgrade is likely to continue in future. The next support level for the stock is at 329.

To make profits, traders are recommended to invest in a low or below option contract and select the trade expiry of 1 week. Traders should target an entry near $349.

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US Justice Department Levies $30M Fine to Tesla’s Solar City
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US Justice Department Levies $30M Fine to Tesla’s Solar City
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Tesla turns bearish after its subsidiary "SolarCity" agreed to pay $30M to settle US government charges of inflating solar panel installation costs.
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BinaryManual.com
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Rich Archer

Rich Archer

Hi, my name is Rich Archer. I am living in London. Welcome to Binary Manual. Reach to Binary Options broker reviews and market news here.


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