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Tesla President Elon Musk will speak at the unveiling of the new Tesla Model Y in Hawthorne, California on March 14, 2019.
Frederic J. Brown | AFP | Getty Images
Tesla shares rose more than 1% on Thursday after CEO Elon Musk e-mailed all employees, saying the electric vehicle maker was about to reach its production targets for model 3 this quarter.
The optimistic tone of e-mail helped Tesla's actions become positive for the first time in seven days. The company added more than $ 500 million to its market capitalization, reaching about $ 34.6 billion early in the trading session on Thursday.
Here's what Musk wrote to employees:
Subj. Exciting goal!
Date: May 22, 2109
To everybody
Yesterday, we recorded more than 50,000 net new orders for this quarter. Based on current trends, we have a good chance of surpassing a record 90,700 deliveries in the fourth quarter of last year and making it the highest quarter in terms of deliveries / sales in the history of You're here!
To do this, we need a sustained production of 1,000 models 3 per day. Nearly all parts of the Model 3 production system exceeded 1,000 units over several days (congratulations!) And we averaged 900 per day this week. So we are only about 10% of 7,000 a week.
If we gather together, we can do it!
Thank you for your hard work
Analysts had lost confidence in Tesla's shares over the past week when the company went into cost-cutting mode. In an email to employees by CNBC last week, Musk stressed the need for "drastic" measures to cut spending.
Citi analysts said Tuesday that Tesla shares could fall more than 80% to $ 36, citing "persistent concerns about demand / free cash flow (FCF)." In a private conversation with Morgan Stanley's clients on Wednesday, Adam Jonas, an analyst at Morgan Stanley, said he was skeptical about the company's ability to grow, CNBC said.
"Tesla is not really seen as a growth story," Jonas told the call, which CNBC heard in a recording. Today, "it looks like a history of credit and restructuring in trouble".
The co-founder of Loup Ventures, Gene Munster, has announced the stock its latest downward revision on Thursday. Munster expected the company to miss its delivery expectations this year, especially as trade tensions between the US and China persist. It lowered shipments estimates for 2019 from about 10% to only 310,000 vehicles, against forecasts of between 360,000 and 400,000.
While Musk's email to Tesla employees sheds light on the progress of production, logistics remains another challenge for the company to reach its delivery targets for the second quarter.
In the first quarter of 2019, Musk said the increase in overseas operations had put a strain on the company's logistics operations. Half of Tesla's global shipments occurred in the last 10 days of the first quarter.
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