Musk drama obscures signs of progress on Model 3
The end of Elon Musk’s go-private-or-not saga with Tesla Inc. leaves investors back where the drama began: waiting to see if he can make more Model 3 sedans.
Signs of progress on this front may have softened the blow of the chief executive officer (CEO) electing to stay public after all. Production of the all-important Model 3 sedan might have steadily exceeded 5,000 a week for much of this month, according to Bloomberg’s tracker of Tesla-registered and ownerreported vehicle identification numbers.
Estimates from the tool— which can fluctuate from week to week based on the company submitting new VINs in batches—suggests Tesla may even have cleared the 6,000-a-week target set for late August. Tesla shares traded down 1.6% to $317.77 as of 3.45pm on Monday, paring a decline of as much as 4.3% earlier.
Musk faces huge pressure to show progress with the Model 3 after his 17-day dalliance with buying out some shareholders drew regulatory scrutiny and investor lawsuits. Ramping up production to the levels the company has forecast is pivotal to generating the profit and cash flow that the CEO has projected for this quarter. It would ease concerns about Musk’s leadership and Tesla’s precarious cash position.
“This was a big distraction over the past two weeks for all stakeholders, and now it’s time to make cars, deliver cars that make people happy, build a good product, and generate some cash flow,” Ben Kallo, an analyst at Robert W. Baird & Co., said Monday on Bloomberg Television.
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