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Here's What Elon Musk Calls The Biggest Risk To Bringing Model 3 To Market On Time

Here's What Elon Musk Calls The Biggest Risk To Bringing Model 3 To Market On Time

In a recap of the Tesla Motors Inc (NASDAQ: TSLA) Gigafactory tour, Pacific Crest Securities said notice of Model 3 manufacturing issues shook investor confidence in the company’s ability to remain on production schedule.

Analysts said CEO Elon Musk alluded to a potential risk regarding an uncontrollable element of the thousand-step manufacturing process: namely, the ability of a third-party supplier to deliver customized die-stamping machines for the vehicle body.

Musk briefly mentioned the risk — a move that analysts called a possible “hedge” — without providing additional details.

The Model 3 is expected to be brought to market late in the third quarter.

Also At The Meeting...

The Gigafactory, which Tesla constructed for between $4 billion and $5 billion to produce lithium-ion batteries, was the subject of numerous questions. The possible introduction of a new silicon lithium-ion battery in the coming years posed a concern for investors, who questioned the company’s ability to adapt its facilities to produce altered technology. Pacific Crest predicted that any shifts would require a new manufacturing facility.

Furthermore, Tesla confirmed it achieved a 30-percent cost decline for kilowatts per hour required to power its products.

Despite enduring questions regarding product demand and the company’s production rate capabilities, Pacific Crest maintains a positive immediate outlook on Tesla, the shares of which spiked about $10 at the start of the year and have fallen about 3 percent on Thursday.

Latest Ratings for TSLA

Nov 2019MaintainsBuy
Oct 2019MaintainsEqual-Weight
Oct 2019DowngradesNeutralSell

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