Tesla has been working hard to recover from manufacturing difficulties that it had in 2017 and has promised to build 55,000 of the popular Tesla Model 3s during the current quarter; equaling out to 4,230 models each week. All with the hopes of meeting profitability and cash flow goals in 2018.
The luxury and technologically advanced brand stated that in July they were manufacturing approximately 5,000 Model 3s weekly but announced their weekly target of 6,000 by the end of August. Many analysts are skeptical and believe that consistently building 5,000 per week isn’t sustainable.
A spokesperson for Tesla has said that the demand for the Model 3 has remained impressively strong, and that they’ve successfully delivered their 200,000th electric car in July. That figure also includes sales of the more expensive Model X and S cars.
Since last year, the new sedan has faced many manufacturing issues, and CEO Elon Musk is under constant pressure to prove that he’s able to deliver what he promises. Tesla has denied that they don’t need to raise funds to make production growth happen, but Wall Street analysts expect otherwise.
Tesla ended their second quarter with a whopping $2.78 billion after having spent $610 million in capital expenses. The first quarter ended with $3.2 billion after $656 million worth of capital expenses.
Reservations for Tesla’s Model 3 were opened up in July, and those who were purchasing more expensive models of the base models were able to jump ahead of the line; regardless of how long others had been waiting. Some deposit-holders were angered, and financial and business analysts questioned whether clients would drop off of the reservation list. In July, Tesla announced there were approximately 420,000 reservations for the Model 3, and that number has not yet been updated.
Adding fuel to the fire, Elon Musk has come under extreme scrutiny as of late and has been using Twitter as a platform to stir the pot. Musk acted out on Twitter by dismissing a financial analyst’s conference call by referring to it as boring and a sell-off. Additionally, Elon Musk used Twitter as the platform to call one of the British diver’s working on the Thailand cave rescue a pedophile, which caused a negative reaction from one of Tesla’s largest shareholders. After being told that Musk should cease tweeting and focus on the company business, he apologized.
In the third incident on Twitter, the CEO announced that he is considering taking Tesla private at $420 a share and that funding is secured. Investors were shocked at the announcement, and three days later, Tesla and Elon Musk were sued twice. The company has failed to comment on reports of a class-action lawsuit that has been filed in San Francisco’s federal court. The plaintiffs of the individual suits sued the company and its CEO for apparently looking to decimate short-sellers, and fraudulently inflating Tesla’s stock prices and violating federal and state security laws.
Musk’s tweet concerning taking Tesla private assisted with pushing Tesla’s stock price more than 13 percent higher than the previous day, and since then, Elon Musk hasn’t provided any type of evidence that he has secured the funding that’s needed to take Tesla private.