The production goal of Tesla, which is expected to last all night, fails to convince Wall Street

burning midnight oil to reach its long-standing objective of producing 5,000 model 3 vehicles a week, failed to convince Wall Street that the automaker could maintain this pace of production, with shares down 2.3% Monday.

Tesla reached the target by operating 24 hours a day for seven days, installing a new production line in a tent on the campus of its Fremont plant and attracting other project workers, according to Company and employees of the factory.

Tesla's sharply outskilled shares rose 6.4% to $ 364.78 early in the session, but fell after several badysts wondered if Tesla would be able to maintain model 3's production momentum , crucial for long-term financial health. "In the meantime, we do not consider this production rate as operationally or financially viable," said Efraim Levy, an badyst at CFRA. "However, over time, we expect the manufacturing rate to become sustainable and even increase."

Levy reduced CFRA's rating on Tesla shares for the "sell" of "hold".

Tesla, whom General Manager Elon Musk praised on Sunday as being a "real auto company," said he now expects to increase production to 6,000 models 3 a week by the end of the month. August, confirming his confidence in the technical and badembly problems.

Tesla also reaffirmed a positive cash flow and profit forecast for the year and announced that Doug Field, executive vice president of engineering, was resigning after five years with the company. business.

Tesla has been Problems related to excessive dependence on automation, battery problems and other bottlenecks have potentially compromised Tesla's position in the car market electric while many competitors are preparing to launch competing vehicles.

Colin Langan said that there was some relief from the company reached the production target of model 3, he noted that the second quarter vehicle shipments of 40 740 missed his expectations for 51,000 th The consensus estimate of 49,000.

He also wondered if the company could maintain faster production and its earnings prospects.

"We are very concerned about quality and if you read the reports online, there are significant quality issues, but they still have not proven that they can make them profitable.

Model 3 production tripled to 28,578 in the company's second quarter from the previous quarter, Tesla said.

The company said 11,166 model 3 vehicles were in transit to customers at the end of the second quarter and that they would be delivered early next quarter.

Bookings at the end of the second quarter rose to about 420,000. Tesla delivered 28,386 cars model 3 to date: Model 3 bookings totaled 450,000 at the end of the first quarter.

The company expects orders to grow faster than the production rate, allowing potential customers to see and test the models 3 In the local stores. "Initially touting the Model 3 as a $ 35,000 vehicle, Tesla has not yet begun to build this base version and instead is building a more expensive model while it is still in its infancy. he tries to get out of "the hell of production".

The prices of the three Tesla convertible bonds have changed little in reaching the production target, suggesting that price volatility has discouraged bondholders from converting their shares into stocks despite good news production. or 27.5% of the available-for-sale shares were sold short and investors did not appear to be hedging their positions prior to Monday's announcement, according to Ihor Dusaniwsky, managing director of S3 Partners, an insurance company. financial badysis.

"You wonder if traders are on the verge of risk on Tesla: at some point, you're gorged, you can not take another bite," he said. shares of David Kudla, founder and CEO of Mainstay Capital Management in Grand Blanc, Michigan. "The push to achieve these self-imposed goals calls into question the cost of building these cars and how quality has been affected," said Kudla, who is personally short. Tesla stock.

"Whether someone misses $ 361 or $ 300, everything will be fine."

(Reportage of Supantha Mukherjee in Bengaluru and Sinead Carew in New York: Additional reportage of Kate Duguid in New York and Munsif Vengattil in Bangalore, edited by Tom Brown, Alden Bentley and Lisa Shumaker)

(This story n & # 39; was not edited by Business Standard staff and is generated automatically from a syndicated feed.)