Musk must “stop over promising and under delivering" say analysts
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Tesla's recent issues with production of the Model X and the upcoming new compact Model 3 have been well documented. As have reports on the manufacturer's financial losses, in spite of their growing success in markets like New Zealand where their cars sit towards the top of the EV sales charts.
Well, some of the world's top financial analysts have had their say on the matter; from encouraging Tesla to lower their price targets, to encouraging share holders to sell up.
Cowen and Co analysts appeared particularly scathing, saying that the company's CEO Elon Musk “needs to stop over promising and under delivering” as noted by Reuters.
“Tesla needs to slow down and more narrowly focus its vision and come up for a breath of fresh air,” they added.
The news comes as Tesla report their worst ever quarterly loss last week — US$619.4million (or NZ$896.8million). This has prompted shifting in several areas.
Their share price fell by more than six per cent on the day, four major houses including Goldman Sachs cut their price targets by between five and 10 dollars, and Tesla themselves pushed back their early Model 3 production target of making 5,000 cars a week by three months.
It isn't all bad, by any means. Tesla's incredible hype is still having a positive impact elsewhere, like their increase in shares and the resilliance and optimism of numerous shareholders and certain analysts — including Evercore ISI's Arndt Ellinghorst.
“What are the implications for 2018 and 2019? While behind, if Tesla does hit its target of 5,000 units a week by the end of Q1 then we see Model 3 production of about 293,000 as feasible,” he said.
“In our own model, we now assume that 5,000 is not reached until the middle of Q2, resulting in production of 268,000 units. As a result we cut our 2018 Model 3 delivery forecast by 14,000 to 258,000.
“However for 2019, our Model 3 forecast is largely unchanged given we are only forecasting deliveries of 326,000, which should be easily be met even if the ramp to 10,000 units a week takes substantially longer than presently expected.”
And so the gumbo of commentary from analysts from both sides of the Tesla coin goes on. Bernstein's Toni Sacconaghi says they're “clearly still suffering from production issues”, while Berenberg Bank's Alexander Haissl says that the company will “pay the price” for their unique 'automated' manufacturing process but suggested that the recent set backs haven't compromised the pursuit of this but rather simply “delayed” it.
Musk has unsurprisingly remained defiant, calling out skeptics last week by asking openly "which one of them predicted that Tesla would go from 2,500 units delivered to 250,000 units now?" Adding "I would suspect zero."
Not to put to fine a point on it, but what this all emphasises is just how important the Tesla Model 3's success is for the manufacturer.
Yes the Model X and the supposedly upcoming Tesla crossover live in a hot selling space in the marketplace. But, the Model 3 has sucked up buckets of resource during its development, and represents the brand's first attempt at reaching out to the mass market.