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Published: Sat, January 06, 2018
Research | By Jennifer Evans

Analysts remain upbeat on Tesla despite production miss

Analysts remain upbeat on Tesla despite production miss

He said: "We're very grateful to everyone at Tesla who has poured their heart and soul into helping with the Model 3 ramp and creating the progress we are seeing". Previously, Tesla was hoping to reach the 5,000/per week rate by the end of March.

Thursday's drop is a welcome sign for traders who have been loading up on bets against Tesla.

Chief Financial Officer Deepak Ahuja had reassured investors that cash flow would "improve significantly" over the next few quarters as Tesla continued to ramp up Model 3 production.

Shares of Tesla Inc (TSLA) hit lows unseen in a month during Thursday's trade, one day after the company once again pushed back its production objective for the keenly-anticipated Model 3 sedan. Now we're into January, we can report that Tesla fell a little short - it made just 1550.

Tesla reported 860 Model 3 sedans were in transit to customers at the end of December.

The company burned through $1.1 billion in cash in that quarter and said in November it would spend roughly the same amount in the fourth quarter. The company announced the acquisition of Perbix, a closely held maker of automated machines used for manufacturing, back in November, a week after Musk cited challenges with automating Model 3 production. The carmaker has been blowing through more than US$1 billion ($1.4b) a quarter as it's had trouble scaling up output despite spending heavily on robots, assembly lines and tooling for the sedan that is Musk's cheapest yet, starting at US$35,000. From a slow start, the company believes it now has the capacity to knock out 1,000 Model 3s each week, and 2018 will see even bigger milestones.

The estimates for Model 3 deliveries by different brokerages varied widely.

The company said it will "continue to focus on quality and efficiency rather than simply pushing the highest possible production in the shortest period of time".

Nonetheless, Tesla reported that it delivered 1,550 Model 3s in Q4 2017. Full-year 2017 vehicle deliveries reached 101,312, 33% higher than 2016.

It'll take Tesla another three months to double that number.

The Model 3 is expected to arrive in the United Kingdom in 2019.

Analysts said on Thursday they continue to believe that sales of the Model 3 sedan could transform the niche automaker into a mass producer, giving it an edge over a host of rivals such as General Motors and BMW who are entering the nascent electric vehicle market.

For the entire past year, the shares of the NASDAQ-listed electric vehicle maker rose 45.70% following a 10.97% slump in 2016.

That pace of production is still below that of many carmakers.

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