Delivery woes dent Musk’s Model 3 glee
Wall Street on Monday slammed the brakes on Elon Musk’s joyride.
Calling Tesla’s Model 3 production spurt last week “Herculean” but not sustainable, one analyst burst the bubble of what was likely 12 hours of elation at the company’s Fremont, Calif., plant.
After expanding its production footprint and having employees work overtime, Tesla finally hit CEO Musk’s goal of producing 5,000 cars a week.
Musk sent a Sunday night congratulatory e-mail to employees and declared the electric-car maker ready to increase production to 6,000 cars a week.
Investors on Monday morning were as giddy as Musk, and sent Tesla shares up more than 6 percent in early trades. But one week does not a quarter make. Goldman Sachs analyst David Tamberrino, in a report, pointed out that Tesla delivered 18,440 Model 3s in the second quar- ter — well below his estimate of 28,000.
Deliveries in the quarter — including 10,930 Model S cars and 11,370 Model Xs — totaled 40,740, also below forecasts.
The second-quarter production and delivery stats turned a morning gain for Tesla shares into a 2.3 percent decline at the close, at $335.07.
CFRA Research’s Efraim Levy described Tesla as displaying “Herculean efforts” to reach its goal, but said that he does not see “this production rate as operationally or financially sustainable.”
Joseph Spak from RBC Capital Markets described Tesla’s last-minute push as a “burst rate,” and said it’s likely not sustainable to have so many employees working overtime or building cars in tents.
Overall, Tesla produced 53,339 vehicles in the quarter, up 55 percent from last year.
“The last 12 months were some of the most difficult in Tesla’s history, and we are incredibly proud of the whole Tesla team,” the company said in a regulatory filing.