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A Goldman Sachs analyst that has been bearish on Tesla for years has written in a note to clients that the EV maker might once again fail to meet its production deadline for the Model 3, Bloomberg reports, citing the note.
David Tamberrino, who has maintained a “sell” rating on Tesla since February 2017, said that Model 3 deliveries are growing more slowly than they should, suggesting that investor expectations about the production rate of Tesla’s affordable model in the second quarter may turn out to be too optimistic.
Tesla has pledged to ramp up production of the Model 3 to 5,000 weekly by the end of this month. With several missed deadlines already, however, investors have the right to be skeptical despite assurances from Elon Musk that this time, the deadline will be kept.
Tamberrino wrote in the note that “Investor conversations on the stock have moved past the 5,000/week run-rate production target (as we believe most are giving the company credit for achieving this level entering third quarter) toward vehicle profit margins and conversion of Model 3 reservations to higher priced vehicles.”
In fact, Tesla is already selling higher-priced Model 3s and promoting new, even more expensive, higher-performance versions. Some have questioned the wisdom of doing this before meeting your own production targets, but Tesla has proven multiple times that it does not do things the usual way.
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Still, earlier this month it unveiled a new production line for the Model 3 at its Freemont factory. It is the third production line, and the fact that it was built in just three weeks suggests that this time, Musk may be serious about deadlines.
The company will be reporting second-quarter financial and production figures in early July. It has been plagued not just by delays in production, but also by several crashes that drivers have blamed on its Autopilot system, and most recently an employee sabotage.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.