Will Tesla be able to meet its production expectations?

Elon Musk plays everything for everything with the Model 3, a car that he expects to produce about 5,000 units a week. Analysts question this figure, which, if it is below expectations, could have huge consequences on the valuation of the company

The launch of Tesla's Model 3 was another difficult quarter . Production was suspended at least twice to bring improvements to the factory, a new production line was installed in a tent in the parking lot and Tesla's general manager, Elon Musk, went from sleeping on the floor. sofa to sleep under the desk. It has even been seen tightening bolts on an assembly line, with a summer intern.

Now, the crazy race to meet the self-imposed production deadline – a rate of 5,000 cars a week in late June – is coming to an end. The quarter ends Saturday and Tesla is expected to announce production figures for the last three months before the July 4th holiday.

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In February, Bloomberg introduced an experimental tool to monitor the launch of Model 3. The monitoring system uses Vehicle Identification Numbers (VIN) to estimate the production in real time. The model predicts that Tesla ended the quarter by assembling 27,957 Model 3 or 4,533 last week, below Musk's goal. Since the production of Model 3 began in July 2017, the Bloomberg barometer estimates that 40,409 sedans have been manufactured. Musk himself has suggested that this estimate is too low. A report by Goldman Sachs analysts, which forecast a quarterly output of only 43 more cars than our estimate, prompted the CEO to send an email to his employees. "They're going to have a big surprise," Musk wrote.

Wall Street also placed bets around Tesla's quarterly numbers. The average of eight analysts examined the expected deliveries of Model 3 for the second quarter of 26,121 automobiles. Three analysts also provided estimates of production, which averaged 30,167.

The most visible figure is Tesla's weekly production rate, an ambiguous figure that Musk has established as a quarterly reference. Initially, Tesla was aiming for a rate of 5,000 per week by the end of 2017, but the company has reduced that goal twice. Only one company has risked a weekly production estimate: Evercore ISI predicts that Tesla will reach 4600 in the last week.

Total shipments for the S and X models are expected to be about 22,622 units, based on an average of six estimates.

Tesla shares were in a bullish run in the second quarter, driven by apparent progress in model 3 production. The stock rose 31%. Tesla's market value was $ 59,400 million, outperforming the historical competitors, General Motors and Ford Motor.

Below is a summary of what analysts say before the release of figures. Deliveries:

– Goldman Sachs, David Tamberrino: (sales price, target price: 195 dollars):

"We believe that model 3 deliveries are below consensus". "Investor conversations about inventory have already exceeded the production target of 5000 per week (since we believe that most investors give credit to the company to reach this level at the same time). Third quarter entry to profit margins Tesla estimates that Tesla will reach approximately 22,000 model 3 shipments to customers during the quarter, above Goldman's previous estimate of 19,000, but well below this consensus, its production forecast is 28,000, in line with the Bloomberg barometer.

-Barclays, Brian Johnson (lower weight, US $ 210 indicative price):

"Although we appreciate the measures taken to increase capacity, we believe that recognizing that he needed a second general assembly line to reach 5,000 a week is another indicator of the challenges he faces po To increase its production "On the road to reach 10,000 Model 3 per week, a key element that needs to be addressed is the capacity of the paint area. The paint area should have an additional capacity of 10,000 Model 3 per week, in addition to 2,000 S / X per week. "