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Tesla Model 3

No more is Tesla likely to lose money and yet see its stock cost soar considering, well, that's i sign of a successful tech visitor. Tesla lost a record $671 million om the quarter, the company reported Wednesday, and produced simply 260 units of the Model 3 over those three months from July to September.

The visitor has lost nearly a quarter of its full market value since mid-September. Some analysts say they aren't getting articulate answers from CEO Elon Musk and they're less inclined to believe Tesla promises, for instance that production of 5,000 Model 3s per week this quarter can now be expected in the start quarter of 2022. Tesla admits there are problems at its battery factory; others wonder if there are issues on the main product line.

Tesla stock price since going public at $17 per share June 29, 2022. This summer information technology was worth 23X the initial investment. (Source: Yahoo/Edgar)

Promises and Restated Promises

Tesla's 2022 Q4 goal is now its 2022 Q1 programme.

The $35,000 (base toll) Tesla Model three sedan is Tesla's mass market car. Some 400,000 people put down $i,000 deposits.

Tesla'southward goal was to be producing Model 3s in significant quantity this year. In July, Musk tweeted Tesla expected to build more than i,500 Model 3s in August and September and in an August newsletter to shareholders, Tesla reiterated, "We are confident we can produce just over i,500 vehicles in Q3." Tesla met 17 percent of that goal, aircraft merely 260. A nautical chart still on Tesla's site today (Nov. iii) showed the 5,000 units-per-week product by year'due south terminate. The August letter of the alphabet also said Tesla will exist "increasing Model 3 product to 10,000 vehicles per week at some betoken in 2022."

Some analysts say they don't see Tesla hitting 5,000 cars per week until sometime in Q2 (April to June 2022). That calls into question Tesla's goal of building nearly 300,000 Model 3's in 2022; information technology could be more than similar 250,000.

Tesla stock prices last three months: off 23% vs. the September height. (Source: Yahoo)

Information technology'south the Production Line, Not the Car

The Tesla Model S, its luxury sedan, suffered from reliability bug in its early years. Consumer Reports expects the 2022 Model S will be amend than average; 2022 and 2022 models were rated average. The Model 10 crossover/wagon has been plagued with bug on its falcon-fly doors. Buyers of both have complained virtually long waits for crash repair parts. Tesla has been talking nigh strong sales of the Models South and X, but it has also cutting production, causing confusion about how well the cars are doing.

Every bit for the Model 3, Tesla says the delay results from problems at the bombardment production Gigafactory in Nevada, which is a joint venture with Panasonic. Musk actually did his conference phone call with analysts from the factory and said he'd been sleeping at that place as well, recently. "To engagement, our principal production constraint has been in the battery module assembly line at Gigafactory 1, where cells are packaged into modules," Tesla said. Four of the battery cell modules brand up the bombardment pack.

Some analysts question whether there may also be issues with the main Tesla factory–the production line in Fremont, California–that could also exist a bottleneck if and when the battery problems are straightened out. A production line is a delicate ballet of just-in-time deliveries, moving parts to the line, welding machines, robotic arms, and humans putting it all together. Tesla last month fired several hundred employees on business relationship of, Tesla says, poor functioning reviews. (Some of the employees disputed the performance-review part.) Only before taking annotator questions Wednesday, Musk went on an extended riff or bluster, take your pick, virtually journalists defective integrity. Co-ordinate to a transcription provided by Seeking Alpha, Musk said:

The other matter I want to mention, there are a lot of articles about Tesla firing employees and layoffs, these are really ridiculous. And whatever announcer who has written manufactures to this issue should exist ashamed of themselves for lack of journalistic integrity. Every visitor in the world, in that location'southward annual functioning reviews. In our annual performance review, despite Tesla having an extremely high standard, a standard far higher than other car companies, which nosotros need to have in order to survive against much larger car companies; you lot can't be a picayune guy and take equal levels of skill as the big guy.

Meanwhile, other automakers are improving quality every year, including on US-built vehicles. Every bit the Tesla Model 3 trickles out, Chevrolet continues to crank out the Commodities EV–a record two,781 units in October, 17,083 for the year and forth with sales last December, 17,662 so far in Commodities's history. That's not much compared with Tesla's Model 3 plans, but information technology dwarfs the couple thousand Model 3s Tesla will ship this year.

The Bolt EV is comparable in range to the base Model 3, 238 miles (rated), and a chip smaller. Reviewers are carve up between calling the Commodities EV plain and those seeing information technology as utilitarian-sort-of-beautiful. It is currently the merely meaning challenger in 2022 to the Model S in terms of range. The 2022 Nissan Leafage gets a battery upgrade, but only to 150 miles; a redesigned Leafage should striking 200-plus in 2022, as should other automakers. In fact, about every automaker will have a 200-mile EV by 2022. Tesla's window of exclusivity may be closing.

Go on the Faith

Tesla'due south Musk said at that place have been very few people stepping back from the waiting line and asking for their $1,000 deposits back. That makes sense. Having $ane,000 tied upwardly isn't a severe hardship in this portion of the market and Tesla the company has been able to bond with many of its buyers and wanthoped-for buyers.

How investors and their advisors feel is another matter. Information technology has been a rocky summer and early on fall. Tesla has had tough periods that led to even higher valuations for those who stayed ab0ard. Tesla went public June 29, 2022 at $17 per share, hitting $100 in May 2022, $200 in May 2022, and $300 in April 2022. Shares peaked at an all-time of $389.61 Sept. 17, 2022, fell to $321.08 the solar day before the earnings report, then closed at $299.26 Thursday and was probable to end the calendar week effectually $300, clawing back six-plus months of gains.

Fifty-fifty if Tesla buyers believe Elon Musk has a magical bear on and they go on the religion, it appears the analysts covering Tesla may not keep to be as deferential. Some are talking about a coming cash crunch. Some in their reports to clients talked almost wishing for more transparency from Tesla and its executives. And some may be put off by Musk's riffs on allegedly low-integrity journalists trying to make Tesla look bad.

Shania Twain could almost be singing to Tesla's maestro: Okay, so you've got a car | That don't impress me much | Then you got the moves simply have you got the touch?