DETROIT – Tesla Motors shares fell the most since early July on Monday, the first day insiders could sell shares that they bought during the electric carmaker’s initial public offering six months ago, reported Reuters.

Monday marked the end of Tesla’s “lock-up period”, 180 days during which investors who bought Tesla stock in its IPO could not sell their shares.

Investors’ doubts that the company could hit its targets in developing its Model S luxury sedan caused the stock drop in part, said Capstone Investments analyst Carter Driscoll, who set a $22 price target on the stock last week.

Tesla, which has not mass-produced a vehicle, has said the Model S is due in mid-2012 at $57,400.

Delays are part of the development process in the automotive industry, said Driscoll, who rated San Francisco-based Tesla a “sell” last week.

“They need to execute almost flawlessly versus their valuation for the stock price to be justified,” said Driscoll.

He said the expiration of the lock-up period was the primary reason behind the stock price’s fall, but the magnitude of the decline surprised him. Shares may climb higher in coming weeks leading up to the Detroit auto show, Driscoll said.

According to a November securities filing, Tesla had about 93.2 million common shares outstanding as of Sept. 30, most of which was restricted under the lock-up agreement.

Beginning Monday, the owners of 75 million shares could sell their stock, which could hurt the share price, Tesla said in their filing.

Tesla shares fell as much as 16.7 percent to $25.06 in trading on the Nasdaq. The stock was down almost 15 percent to $25.60 in afternoon trading.

Tesla debuted at $17 per share on the Nasdaq in late June. Its shares rose more than 40 percent on their first day of trading.

Tesla has not produced a profit. Doing so hinges on the success of vehicles like the Model S, the company said in the November filing. Tesla could not be reached for comment.

Just a few months after Toyota and Tesla Motors announced a collaboration on an electric car, a Tesla spokeswoman says a prototype has already been built and is undergoing testing.

Toyota and Tesla made a big splash in May, announcing Toyota’s planned $50 million investment in the electric car maker and a Tesla takeover of the Nummi plant in Fremont, Calif. On Monday, Bloomberg Businessweek reported that the next steps — to build Toyota electric vehicle prototypes with Tesla power trains — are being undertaken very quickly and quietly.

When reached for details on the Bloomberg report, Khobi Brooklyn, a Tesla spokeswoman, said in an e-mail message that the prototype “is undergoing testing. It will be unveiled to the public later this year.” She declined to comment on specifics but wrote that the companies had signed a development agreement to put together “a high-volume Toyota vehicle with a Tesla electric power train.”

Ms. Brooklyn also passed along a comment from JB Straubel, Tesla’s chief technology officer. “Since our announcement in May, Toyota and Tesla engineering teams have made a lot of progress in a short amount of time and it is exciting to start seeing some initial results,” he said.

Mira Sleilati, a spokeswoman for Toyota Motor North America, also said the company couldn’t confirm the details of the Bloomberg report. “The two companies have teams studying where we might be working together,” she said. “We have not confirmed any particular model. But as we said at the announcement, we have a wide-open view of our possible collaboration in E.V. development and production engineering. ”

According to Bloomberg, Tesla is building electric test versions of the RAV4 and Lexus RX S.U.V.’s, and Toyota will receive them this month. It also said that the goal of the joint development project was an E.V. with a 150-mile range that could be sold for $40,000.

Toyota and Tesla said last spring that they would cooperate on E.V.’s, parts, production systems and engineering support. Tesla will produce its Model S sedan at Nummi, but the large plant could also accommodate a jointly developed Toyota-Tesla vehicle.

Tesla Motors Inc., the electric-car company that hasn’t posted a profit, fell below the $17 price its shares sold for last week in the first initial public offering by a U.S. automaker in more than a half century.

The maker of the $109,000 electric Roadster retreated for a fourth straight day, losing 16 percent to $16.11 in Nasdaq Stock Market composite trading. The Palo Alto, California-based company has slid 33 percent since rising 41 percent on the first day of trading June 29.

The $260 million IPO, the first by an American car company since Ford Motor Co. in 1956, is funding a startup that expects to lose more money in the next two years as it tries to build a $57,400 battery-powered sedan. Chief Executive Officer Elon Musk, who made almost $300 million selling PayPal Inc. and Zip2 Corp., brought Tesla public as the Standard & Poor’s 500 Index posted its worst quarterly drop since 2008.

“The company is a great concept with relatively weak fundamentals,” said Josef Schuster, the Chicago-based founder of IPOX Capital Management LLC and manager of the Direxion Long/Short Global IPO Fund. “Markets are weak and in a weak market right now this is hurting the company even more.”

The automaker, which now has a market capitalization of $1.5 billion, sold 15.3 million shares at $17 each after an overallotment option was exercised, according to filings with the Securities and Exchange Commission. The company will use proceeds for factories and possible acquisitions.

The decline in the shares erased Musk’s paper gains of at least $361 million from the remaining 26.89 million shares he owns in Tesla, the company’s regulatory filings and data compiled by Bloomberg show. His stake is now valued at about $433 million, less than the $457 million after the IPO.

Tesla raised 27 percent more than it originally sought after boosting the number of shares it was offering to 13.3 million from 11.1 million. Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. of New York, along with Frankfurt-based Deutsche Bank AG, led Tesla’s offering.

The stock rallied on the first day of trading even as the S&P 500 slid 3.1 percent on concern over growth in China and lower-than-estimated U.S. consumer confidence. The sale also came after at least 35 companies worldwide postponed or withdrew IPOs since the start of May as the European debt crisis sent the S&P 500 down as much as 14 percent from its 2010 high.

The first-day advance was the second-biggest for a U.S. IPO this year after Financial Engines Inc., according to data compiled by Bloomberg. The Palo Alto-based investment adviser co-founded by Nobel laureate William Sharpe increased 44 percent on March 16.

Electric-car technology has been supported by U.S. policy makers including President Barack Obama as a way to reduce the nation’s oil use and dependence on foreign energy sources. Obama set a goal of getting 1 million plug-in hybrids and electric cars on U.S. roads by 2015 and subsidized Tesla with a $465 million loan from the Department of Energy to develop its cars.

Musk, Tesla’s biggest shareholder, co-founded PayPal, the online payment company now owned by San Jose, California-based EBay Inc., and is CEO of Space Exploration Technologies Inc., a Hawthorne, California-based company that builds spacecraft.

‘Dreams and Visions’

Tesla’s net loss in the first quarter almost doubled to $29.5 million from a year earlier. The deficit is more than half the $55.7 million the carmaker lost in all of 2009.

“They brought this thing into a market that was not rewarding hype,” said Michael Holland, who oversees more than $4 billion as chairman of Holland & Co. in New York. “The stock did get its pop, and now it’s plagued by the reality of the marketplace. The reality of the marketplace is that people aren’t paying for dreams and visions.”

At the original midpoint price of $15, Tesla was valued at 5.5 times its net tangible assets, a measure of shareholder equity that excludes assets that can’t be sold in liquidation. That’s triple the median 1.82 times for automotive companies globally, data compiled by Bloomberg show.

Tesla will use the IPO and the federal loan to develop its lithium-ion battery-powered Model S, an electric sedan intended to travel 160 miles (257 kilometers) per charge, by 2012. The company plans to produce at least 20,000 units of the Model S each year.

As Tesla focuses on creating a niche for premium-priced electric vehicles, Yokohama, Japan-based Nissan Motor Co. and General Motors Co. are developing battery-powered vehicles to appeal to mainstream buyers.

Nissan’s electric Leaf hatchback, which has a range of 100 miles, goes on sale in the U.S. later this year with a base price of $32,780, or a third that of Tesla’s Roadster.

GM plans to introduce the Chevrolet Volt electric car in November. The Detroit-based automaker is preparing for an IPO that may sell 20 percent of the Treasury’s stake in the company and reduce the U.S. to a minority owner, two people familiar with the plan said last month.

NEW YORK – Elon Musk, CEO of Tesla Motors Inc., made at least $24 million from the electric-car maker’s initial public offering, restoring some of the wealth he’s staked on the company and other startups, Bloomberg reported.

Tesla set a price of $17 a share and Musk sold 1.42 million shares, including an over-allotment to underwriters, according to filings and data compiled by Bloomberg.

Tesla shares earlier today rose as much as 27 percent to $30.42, but ended the day down 6 cents to close at $23.83. It posted a 41 percent gain during its first day of trading yesterday — the second-biggest rally for a U.S. IPO this year.

Musk, 39, who made about $300 million selling PayPal Inc. and Zip2 Corp., said in February he had just $650,000 in “liquid assets” and got loans from friends to pay fees and support for estranged wife Justine Musk, according to a divorce- related filing. The value of his remaining 26.9 million Tesla shares was about $642 million, based on yesterday’s close.

Tesla, the Palo Alto, Calif.-based maker of the $109,000 electric Roadster bought by Brad Pitt and George Clooney, is using proceeds from the IPO to begin production of the battery-powered Model S sedan and develop a range of rechargeable models. Along with celebrity customers, Tesla investors include Daimler AG. Toyota Motor Corp. said in May it will buy a $50 million stake.

Electric-car maker Tesla Motors Inc. increased the size of its initial public offering and priced it at $17 a share, above the proposed price range, on Monday night, The Wall Street Journal reported.

The offering, expected to appeal to both clean-energy investors and car geeks, bucks a recent trend of companies cutting the size of IPO plans because of stock-market volatility. Others haven’t been able to complete efforts and shelved deals.

Tesla and existing shareholders will offer a combined 13.3 million shares, according to a Securities and Exchange Commission filing. At $17 a share, it could raise as much as $226.1 million in the sale. The proposed price range had been $14 to $16 a share.

The company previously had said it could sell as many as 11.1 million shares, putting the IPO’s value at as much as $178 million, prior to any use of the overallotment option, which would add nearly 1.7 million shares, or more than $27 million at the top price.

In the event of strong demand, the enlarged offering could be increased by nearly two million shares, according to the filing. The additional shares would come from the selling shareholders.

Under the new terms, there will be 11.9 million shares coming from the company and the rest from current owners. Tesla had projected selling up to 10.6 million shares.

Teslais still the only company selling highway-capable electric vehicles to consumers in volume. It said it has sold 1,063 Roadsters as of March 31 and has unfilled reservations for 110.The Roadster sells for $109,000, or $101,500 after federal tax credits. The Roadster Sport edition costs an extra $19,500. Some states offer additional consumer-tax breaks for buying an electric car, topping out as much as $42,000 in Colorado.

Last month, Tesla said its first-quarter loss widened to $29.5 million from $16 million a year earlier. Revenue was roughly flat at $20.8 million.

The 2010 Automotive Executive of the Year Innovator Award will be presented to Elon Musk, Chairman, Product Architect and CEO of the California start-up, Tesla Motors, The Detroit Bureau reported.

The announcement came just before three Tesla executives were killed when a private plane they were traveling in crashed at the Palo Alto Airport, near Tesla headquarters. Musk was not on board, Tesla officials said.

“Elon Musk is a man who came from humble beginnings to accomplish the extraordinary,” says Robert Djurovic, executive director of the Automotive Executive of the Year Award program, and director of automotive services North America, DNV Business Assurance. The award, he added, will recognize Musk for his “enlightened vision for the automotive industry’s future.”

Indeed, not only the auto industry. A founder of PayPal, the online financial service, Musk has used the incredible wealth that venture generated to explore his passions and visions. He is, among other things, actively pursuing the goal of commercializing space flight with his SpaceX venture, as well as alternative energy, with SolarCity. But, in an interview with TheDetroitBureau.com, last year, the 38-year-old entrepreneur made it clear that electric propulsion is something that he has wanted to pursue since his childhood.

For his part, the South African-born Musk said, “This award is a tremendous honor, in particular because the nomination comes from my respected peers and colleagues. It demonstrates not only the influence that a relatively small startup can have on the global auto industry, but also the speed with which other car companies and suppliers are joining Tesla in the electric vehicle revolution.”

After initially dismissing battery power, General Motors Vice Chairman Bob Lutz recently credited the Tesla CEO with turning him into a proponent. That change in mindset led Lutz to push for the Chevrolet Volt, the well-publicized extended-range electric vehicle GM will launch late this year.