Stock falls after Tesla says it has only made a fraction of the number of the cars it had expected
Shares in Tesla Inc fell 2.5 per cent on Tuesday after the luxury electric vehicle maker said the planned ramp-up of its Model 3 mass-market sedan faced production bottlenecks.
The moves also followed a series of announcements by rival General Motors on its own electric car ambitions, which included a promise to take “bold steps” towards the first completely driverless vehicles.
Tesla, which warned when it launched the Model 3 in July that production would be “hell,” has so far delivered just 220 of those sedans and produced 260 during the quarter.
The production of 260 Model 3 sedans in the quarter was far below the 1,500 target and Tesla’s production goal of 5,000 a week by end of this year 2017 is at risk, Cowen and Co analysts wrote in a research note on Monday.
The brokerage affirmed its “underperform” rating on the stock.
Tesla is also set to face increased competition as rival General Motors Co on Monday outlined plans to add 20 new battery electric and fuel cell vehicles to its global lineup by 2023.
The two automakers are also racing to take a lead in making driverless cars. While GM has built 130 self-driving Chevrolet Bolt electric vehicles, all Tesla cars produced since October last year have included self-driving technology.
“In the coming months, we’ll take the next bold steps in testing our autonomous technology as we lead the way to fully self-driving vehicles without any human driver as a backup,” GM Chief Executive wrote in a blog post on Monday titled “Zero Crashes, Zero Emissions, Zero Congestion.”
GM’s Bolt electric car, priced from US$37,500 before tax credits, will compete with Tesla’s Model 3, at US$35,000 the company’s least expensive car.
Shares of Tesla, which had risen 60 per cent this year, fell 2.5 per cent to US$332.05 soon after the opening bell in New York. GM shares were up 3.4 per cent at US$43.58.
© Thomson Reuters 2017