Tesla Inc. (TSLA, Financial) shares were down 1.29% at noon on Thursday.
The automaker's stock fell after a whistleblower, a former employee named Martin Tripp, filed a formal tip with the Securities and Exchange Commission. Tripp alleged that Tesla, which fired and then sued him, has misled investors.
Tripp said Tesla overstates the number of vehicles the company built. He also claimed the company installed faulty batteries in vehicles and alleged the digital meter that displays the number of Model 3 vehicles the company has produced is "artificially inflated."
Tesla has filed a $1 million lawsuit against the former employee, saying Tripp leaked false information in an attempt to defame the company.
An announcement on Thursday that the company has delivered 200,000 vehicles to buyers in the U.S. is also hurting investor sentiment. The sales figure means that new buyers will receive a lower tax credit, while other manufacturers will be able to offer a full tax credit.
The tax credit, under a law put in place last year, will lower the tax credit by 50% every six months until the tax credit no longer exists. The $7,500 tax credit will drop to $3,750 next year.
General Motors (GM, Financial) will also face a reduction in tax credit incentives. The companies said the reduction in tax credits will put the companies at a disadvantage against newcomers in the industry.
Potential Tesla buyers already started to look for alternatives following concerns that they would not be able to receive the full federal tax break.
GM and Tesla are both petitioning Congress to extend the tax credit in response to strong demand for the manufacturers' vehicles.
Tesla has been in the news several times this year, with headlines highlighting autonomous vehicle crashes. One woman hit a parked firetruck going 60 miles per hour with her autopilot system running. Her hands did not touch the steering wheel for over 80 seconds, alleviating the company of responsibility for the crash. Another driver died when the autopilot sensors couldn't detect a large truck against a bright sky.
Tesla also announced this week it has signed a memorandum of understanding with Shanghai-area authorities. The company plans to open a plant in China that will rival Tesla's plant in the U.S. The U.S. plant has a 500,000-vehicle-per-year capacity and is based in Fremont, California.
The company has been considering a manufacturing plant in China for the last year, but the 40% import tariff on U.S.-made cars is making the move more challenging for Tesla. The company also plans to open a plant in Europe.
Disclosure: The author does not have any stakes in the listed equities.
