Tesla is always making headlines, and this time there is a bad news. Tesla’s newest in line, the smaller and cheaper Sedan 3 targeted towards a mass audience, seems to have missed its production targets as the company announced disappointing numbers for its quarterly production.
Following the announcement, Tesla has seen a 5 percent decline in its shares in the pre-market trading, as reported this Monday. This has come as less of a shock after last week’s drastic decline of 12 percent which was their lowest in quite some time. It seems like the safety regulators’ report on Model X crash in autopilot mode went a long way to damage the company’s goodwill among stakeholders. Owing to all such mishaps, the automobile giant has seen a decline of 15 percent in its value this year, with shares going as low as $255.5.
Despite all shortcomings, Tesla is quite positive about its ability to meet production targets and has committed to deliver a production of 2,500 for their much-debated Model 3, but the recent numbers so far suggest that this is most certainly going to be a challenge.
Model 3 has been the talk of the town since its debut in 2017 because if its the highest safety ratings in every category, starting at only $35,000 before incentives. Not to forget Model 3 achieves 220 miles of range too. But producing a relatively cheaper electric car is one thing, sustaining its sales is another. That is also one of the areas where Tesla is seeing an uphill battle in the form of battery costs.
However, in an attempt to bid for their best possible shot, Musk himself has taken control over the production efforts. In one of his recent interviews to The Information, Musk confirms how he has taken this as a priority stating that “My job as CEO is to focus on what’s most critical, which is currently Model 3 production.”
Ahead of this announcement, Baird analyst Ben Kallo commented on the deliverability of the company and wrote in one of his notes that “We like the set-up headed into Q1 deliveries as we believe sentiment is overly negative, and think Tesla may be able to exceed lower expectations.”
Regardless of how optimistic a few Wall Street analysts sound regarding Tesla’s production numbers, it goes without saying that the company needs to target a heavy amount of sales pertaining to their Model 3 if it wishes to stabilise in the long run.