Tesla Misses Model 3 Production Target for First Quarter

by Fredrick Graves April 6, 2018, 1:59
Tesla Misses Model 3 Production Target for First Quarter

Concerns over the company's finances had been rife, with the credit rating agency Moody's downgrading Tesla's rating last week.

Musk made a similar statement to relieve doubts a little more than a year ago when Tesla was facing questions about the cash it had been burning through as the company was scaling up for the Model 3.

Tesla has not been cash-positive for its 10 year history (with the exception of 2013 when a hoard of government incentive credits pulled it briefly cash-positive), so it has been relying on a series of share and debt issues to keep going.

Invest wisely, my friends. The electric automaker said it manufactured 2,020 Model 3 vehicles in the last week of its first quarter, falling short of its 2,500 vehicle goal.

Last week, Field had also sent a mail to its employees announcing Tesla would reallocate employees to focus on Model 3 production.

Heading into the final week of the quarter, a Tesla executive urged line workers at the company's sole auto-assembly plant in Fremont, California, to safely ramp up Model 3 output to more than 300 a day and "prove a bunch of haters wrong".

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Wall Street is feeling more cautious about Tesla after the electric automaker once again missed production expectations for its newest Model 3 sedan.

The quarterly production rate of the Model S, X and Model 3 combined increased by 40% from the previous fourth quarter.

But a series of setbacks have left Tesla far behind schedule in turning out the Model 3 - for which almost 400,000 prospective buyers have already put down $1,000 deposits - and it is taking some extraordinary measures to turn things around.

"While it seems a ideal storm is weighing on the shares, we are buyers into pressure as Model 3 production ramps". This comes at a perilous time for Tesla amidst a whirlwind of negative news.

Based on this estimation, it would mean that Tesla delivered between ~4,700 and ~5,900 Model S vehicles and between ~4,000 and ~5,000 Model X vehicles in the United States during the first quarter. JPMorgan's Shawn Quigg advised clients to use some of the profits on the TSLA sale to "purchase Tesla June 100 strike puts for $2.01, indicatively ($252.48 reference price), as we believe the market is underpricing Tesla tail risk". Tesla has become a very unusual share animal - what analysts call a "story stock". What took our team five years for S/X, took only nine months for Model 3.

Bloomberg News' experimental tracking model estimates that Tesla built about 9,285 Model 3s for the first quarter, or about 774 a week.

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