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Liam Denning

To Love Tesla, Simply Lower Your Expectations

Even after a rough week, investors are still forgiving.
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Photographer: David Paul Morris

When a stock trades at 62 times forecast Ebitda, it's tempting to blame high expectations. But in Tesla's case, low expectations are equally culpable.

Tesla Inc. is having a bad week. On Thursday, the Insurance Institute for Highway Safety said Tesla's Model S sedan failed to achieve its top crash rating despite some improvements made after the last time it fell short. This followed Wednesday's news that Volvo -- owned by China's Geely Automobile Holdings Ltd. -- would at least partly electrify all new models from 2019 onward.