Tesla (TSLA) Stock Recovers Despite Fears of Model 3 Production Bottleneck

Andrew Cummings
October 5, 2017

It turns out that there's a new bull in town, and he's got a new ultra-bullish price target as he sees a path for Tesla stock to hit $500.

GM's Bolt electric auto, priced from $37,500 before tax credits, will compete with Tesla's Model 3, at $35,000 the company's least expensive vehicle.

Although the Model 3 has encountered some delays, Tesla was still able to deliver over 26,000 vehicles in the third quarter, thanks to the strong performance of the Model S and Model X. The total number of delivered vehicles is equivalent to a 4.5 percent increase from its delivery numbers during the same time past year.

While some analysts may be concerned lately over Tesla's ability to manufacture the Model 3 on time, one Wall Street firm believes his peers are missing the big picture. The ceremony of handing the keys to the electric vehicles took place in the headquarters of this American company. Tesla intends to increase this figure to 1,500 vehicles in September, and by the end of the year promises to produce about 20,000 units per month. Supplies grew by 4.5 % compared to the same period last year and 17.7% compared to the second quarter of this year. They will be delivered in the fourth quarter of 2017. As a result, the Model 3 costs $140 per mile of range versus the competition's $236 per mile of range, according to the analyst.

"I would be surprised if anyone was surprised that they came up short", said Sam Korus, an analyst at Ark Investment Management in NY, which holds Tesla shares.

Similarly, Tesla will dominate the electric vehicle market by controlling and perfecting every aspect of vehicle production, Shah argues.

Tesla said that there were no fundamental issues with the Model 3 production or supply chain and production issues would be addressed in the near term.

Tesla stirred issue among some experts and investors on Monday by producing just 260 of the 1,500 sedans it had assured in the third quarter, pointing out bottlenecks in production. The failure of this model of electric vehicle, in turn, can attack the capitalization of the company and as a Mask.

This summer, the company projected that 1,500 Model 3 cars will be built in the third quarter. Using the updated data for the targets must increase production by the end of the year almost 250 times that will be really uneasy for specialists. He told Bloomberg Television last week that the Model 3 is "actually sort of a beta test right now".

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