• 4 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 7 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 4 hours Adsorbent natural gas tanks are revolutionary.
  • 4 hours Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 3 hours Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
  • 55 mins Visualizing How Much Oil Is In An Electric Vehicle (Hint: a heckuva lot)
  • 5 mins Theresa May to Step Down
  • 6 hours IMO2020 To scrub or not to scrub
  • 27 mins Total nonsense in climate debate
  • 19 hours Look at the LONGER TERM bigger picture of international oil & gas. Ignore temporary hiccups.
  • 1 day Will Canada drop Liberals, vote in Conservatives?
  • 12 hours IMO 2020 could create fierce competition for scarce water resources
  • 1 day Canada's Uncivil Oil War : 78% of Voters Cite *Energy* as the Top Issue
  • 1 day Trump needs to educate US companies and citizens on Chinese Communist Party and People's Liberation Army. This is real ECONOMIC WARFARE. To understand Chinese warfare read General Sun Tzu's "Art of War" . . . written 500 B.C.
  • 16 hours Why is Strait of Hormuz the World's Most Important Oil Artery
  • 1 day IRAN makes threats, rattles sabre . . . . U.S. makes threats, rattles sabre . . . . IRAQ steps up and plays the mediator. THIS ALLOWS BOTH SIDES TO "SAVE FACE". Then serious negotiations start.
The Trade War Is Transforming Oil Markets

The Trade War Is Transforming Oil Markets

China-US trade talks have exposed…

Tesla Tumbles With News Of Model 3 Production Woes

Tesla

Forgiveness is a precious gift from investors—for as long as it lasts, but with Tesla shares down almost 7 percent over the past week and Goldman Sachs reiterating a sell rating and putting $205 price target on the stock, the days of absolution may be over.

(Click to enlarge)

Now, as Tesla’s Model 3 looks set to miss production targets for the first quarter of this year, analysts say that even the most loyal investors are losing patience.

“We believe the company is tracking below its 2018 Model S/X guidance of approx. 100k units (an implied 25,000 per quarter). Further, while monthly Model 3 deliveries are showing sequential improvement, we estimate that they will fall well short of consensus expectations,” Goldman Sachs’ David Tamberrino wrote in a note to clients.

Tamberrino expects production and deliveries of the Model 3 to continue to ramp up—but at a slower pace than Tesla CEO Elon Musk has previously promised.

According to Bank of America analyst John Murphy, Tesla still has time to get its business on track, but its margin for error is getting thinner by the day.

“Despite being a growing top-line business in need of capital to fund its ambitious growth plans, we think investors may grow tired of supplying Tesla with incremental low-cost capital in perpetuity if investments fail to generate returns soon,” Murphy said.

Still, even with patience running thing, Tamberrino’s $205 six-month price target for Tesla shares seems harsh. After all, this is a 36-percent downside.

And market watchers will also be wise to note that Tamberrino’s record isn’t the best. He’s one of the lowest rated analysts on TipRanks, coming in 4,527th out of 4,783 analysts, with a 48-percent success rate and an average return of -13.5%.

Remember last summer, when he reiterated a sell rating on Tesla stock at $180? It’s not the first time he’s been exceedingly skeptical on Tesla, and lost.

Related: The Truth About Aramco’s $2 Trillion Valuation

But that doesn’t change the fact that Tesla keeps missing its production goals.

Tesla originally said it would ramp up Model 3 production to 5,000 sedans a week in 2017 and then double it per week in 2018. However, it pushed back its 2017 goal to late in the first quarter of 2018 and then again to end of second quarter. The current estimate is 2,500 per week by the end of the first quarter, with 5,000 a week by the end of second quarter.

The Goldman Sachs analyst said Model S and Model X deliveries were also likely to disappoint.

In Q42017, only 1,550 Model 3s were delivered, and with only 220 delivered in the third quarter, that means that since deliveries launched in late July last year, only 1,770 have gone out.

And more trouble is brewing.

Last week, CNBC reported that Tesla has been producing a high ratio of flawed parts further contributing to production delays. Owners noted issues such as glitches in the touch-screen, buzzing sounds, vibration in the steering wheel and misaligned body panels. 

Some execs at Tesla, which is led by CEO Elon Musk, said last week that the company is manufacturing a high ratio of flawed auto parts.

Musk, however, is unfazed.

On Sunday, he said his first spaceship to Mars would be ready by mid-2019, conceding, “Although sometimes, my timelines are a little, you know…”.

By Charles Benavidez for Safehaven.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Pidocchio on March 21 2018 said:
    Elon should have a sidekick er maybe a no.1 henchman to help out
  • Justice on March 20 2018 said:
    Kr55 on March 20 2018 said: ... What a disaster.

    I believe that more disastrous is your short position on TSLA and your failed attempts to bash this stock. Happy to see that people what are betting on failures of others are getting what they've deserved. Karma is a b...
  • Kr55 on March 20 2018 said:
    People inside Telsa are making it known the company is knowingly sending out Model 3's with defective parts, all in a desperate attempt to hit targets. What a disaster.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News