Tesla Inc. (TSLA) PT Lowered to $195.00


The electric automaker has stumbled since it released the first 30 Model 3 vehicles at the end of July with ambitious plans to scale up its operations to pump out the "affordable" electric sedans to compete with much larger, more traditional auto companies.

Tesla stock closed at $321.08 Wednesday, down 3.15%, and was falling further in after-hours trading.

That's the message this week from Nomura Instinet, which reiterated its Buy rating on the electric automaker, noting Tesla will eventually figure out its production issues with the new Model 3 sedan. However Tesla plans to produce about 10 percent fewer cars of both models in the fourth quarter as more resources shift toward Model 3.

Given this, Tesla said it was now targetting production of 5,000 Model 3 cars a week by the end of March, instead of by the end of this year.

Tesla will no longer reach its long-stated goal of producing 5,000 Model 3 cars per week in 2017, pushing that deadline back amid production hiccups and a massive $619 million quarterly loss.

The main production constraint Tesla had faced was at the battery module assembly line, where it said it had redesigned some of the automated processes and was now hoping throughput could increase.

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Tesla stock has gained 51.15% over the year.

Tesla reported that cash and cash equivalents rose to $3.53 billion on September 30 from $3.04 billion at the end of the second quarter, but Tesla in August raised $1.8 billion by selling debt. Tesla said in October that it produced only 260 vehicles, well below its target of 1,500.

CEO and co-founder Elon Musk has loudly and repeatedly promised total production of 500,000 vehicles in 2018, with 400,000 of them Model 3s.

Tesla's continued need for cash is exacerbated by Musk's insistence on vertical integration, such as making its own batteries and selling cars directly to customers. The company had revenue of $2.79 billion during the quarter, compared to the consensus estimate of $2.50 billion.

Tesla's shares have had a rollercoaster of a ride, now trading down 1.60% at $326.24, ahead of the company's earnings report on Wednesday.

Panasonic sees batteries as central to its plan to almost double automotive business revenue to 2.5 trillion yen by the year through March 2022.