Tesla records its most productive quarter to date

05 April, 2018, 01:54 | Author: Brooke Harris
  • Jefferies Upgrades Tesla On Probability Of 'Drastic Action'

The company led by Elon Musk built 2,020 Model 3 cars in the last seven days, trailing its target for a 2,500-unit rate for the final week of March. The mission statement of Tesla is to speed up the world's adoption rate of renewable energy - not to make electric cars. Concern is growing over the Silicon Valley company's poor production performance. The "mainstream" model promises to deliver solid margins but at much higher volume than its other, more expensive models. Tesla needs the auto to succeed to become profitable.

Tesla shares jumped as much as 6.9 per cent in morning trade, recouping a third of its losses from a week dominated by bad news about its credit rating and a crash involving a auto using its semi-autonomous driving technology.

The past three weeks have been enough to worry even the staunchest Tesla bull, with the company's stock dropping as much as 27% to its lowest level in more than a year.

Moody's recently downgraded Tesla's credit rating and also changed the outlook from stable to negative citing the Model 3 production rate shortfall and the company's tight financial situation.

A Tesla spokesperson declined to comment for this story. To conserve cash, the company has intentionally scaled back the solar energy business it acquired when it bought SolarCity in late 2016. Tesla's stock fell by 22 percent in March, the steepest monthly drop since December 2010, the year the company went public. But it may take longer than expected. The company produced 34,494 vehicles, an overall record for the electric vehicle company.

Almost a year later, Musk is back to factory living. Tesla's goal for the quarter was to produce not less than 2,500 Model 3s every week and implemented some remarkable measures in its quest to hit that target.

Tesla said on Friday that the Model X involved in a fatal crash in California last week had activated its autopilot system, raising new questions about the semi-autonomous system that handles some driving tasks.

On Sunday, Chief Executive Elon Musk tweeted April Fools' Day jokes about Tesla going bankrupt (http://www.marketwatch.com/story/tesla-bankrupt-elon-musk-cracks-jokes-after-worst-month-in-7-years-2018-04-01). And it issued its largest recall to date, warning about 123,000 Model S drivers that their car's power steering might fail. That same day, Tesla founder Elon Musk tweeted a series of jokes, including a picture of him seemingly passed out against a Tesla vehicle and holding a cardboard that read 'Bankwupt!'

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Musk has made it clear that he is back to square one and sleeping in a sleeping bag on the factory floor once again. "Vehicle biz is hell ..." An additional duty would further relegate Tesla into a niche marque only afforded by the most wealthy.

Shares of Tesla climbed more than 5% on Tuesday after the company said that the production of its Model 3 cars had gone up to about 10,000 since the beginning of 2018.

But Tesla didn't stop there.

Not all are so impressed with Tesla's results.

Production accelerating so fast it may soon "exceed even that of Ford and the Model T".

READ THIS: Tesla Model 3 quality is bad, but will it matter to buyers?

After all, there are 2,900 jobs on the line.

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