Worries about whether Tesla Inc would meet its promises on production of its Model 3 mass-market sedan in the months ahead sent the electric car maker’s shares more than 2 percent lower on Tuesday as those in rivals climbed.
(Reuters) – Worries about whether Tesla Inc would meet its promises on production of its Model 3 mass-market sedan in the months ahead sent the electric car maker’s shares more than 2 percent lower on Tuesday as those in rivals climbed.
The moves also followed a series of announcements by rival General Motors on its own electric car ambitions, which included a promise to take “bold steps” toward the first completely driverless vehicles.
Tesla strove to play down any longer term risks to the company’s targets when it published delivery numbers on Monday that showed output continuing to rise but “bottlenecks” preventing it meeting its Model 3 targets.
The company, which warned when it launched the sedan in July that it was entering “manufacturing hell”, has so far delivered just 220 Model 3 cars and produced 260 during the quarter.
It had targeted 1,500 sedans in the quarter and to take production to 5,000 a week by the end of the year.
“We see the 5k a week production goal to exit 2017 at risk given the lack of disclosure provided in fixing the ‘handful’ of subsystems that are taking longer than expected,” said Cowen and Co analysts, who already rate Tesla an underperform.
“We remain negative on shares given the execution that is currently priced in despite anticipated competition and capital needs.”
Others were more upbeat, arguing dips in a stock that has climbed 60 percent this year may be an opportunity to buy.
“Most auto launches have hiccups, and Tesla is no exception,” Morgan Stanley analysts wrote in a note.
Tesla said that there were no fundamental issues with the Model 3 production or supply chain and production issues would be addressed in the near term.
“Although Model 3 deliveries were slightly below the range, production challenges were expected for the first quarter of Model 3 production, and we expect production to significantly increase in Q4,” Baird analysts wrote in a note.
GM on Monday also outlined plans to add 20 new battery electric and fuel cell vehicles to its global lineup by 2023.
“In the coming months, we’ll take the next bold steps in testing our autonomous technology as we lead the way to fully self-driving vehicles without any human driver as a backup,” GM Chief Executive wrote in a blog post on Monday titled “Zero Crashes, Zero Emissions, Zero Congestion”.
Shares of Tesla fell 2.5 percent to $332.05. GM shares were up 3.4 percent at $43.58.