ReutersJul 29, 2017 10:05:12 IST
Shares of Tesla Inc rose nearly 1 percent on Friday ahead of a handover to customers of its first Model 3 sedans, the electric cars that Chief Executive Officer Elon Musk is betting will propel his company into the mass market.
Tesla is counting on the Model 3 to help turn the cash-losing company into a profitable one, and its event later on Friday at its factory in Fremont, California comes as the car maker's stock trades down 12 percent from a record high set in June. Fuelled by expectations that Tesla will become a carbon-free energy and transportation heavyweight, Tesla's stock remains up 58 percent year to date, but it is also a favourite among short sellers.
Shorts sellers have about $8.5 billion bet against Tesla, equivalent to about 20 percent of the company's float, according to Astec Analytics. The $35,000 Model 3 is designed for easy production, with output targeted to reach 20,000 per month by December. The Silicon Valley car company aims to quickly ramp up its factory to reach a production target of 500,000 cars per year in 2018. Tesla's last launch was the luxury Model X SUV in 2015, which had a number of production issues.
Tesla reports its second-quarter results on Wednesday, and investors are keen for an update on how quickly its output is expanding after deliveries for the first half of 2017 came in at the low end of the company's own forecast. "This evening's event will keep investors focussed on the Model 3 ramp, and less on the upcoming quarter," Barclays analyst Brian Johnson wrote in a note to clients. Johnson has an "underweight" rating on Tesla.Sceptics believe Tesla's growth targets are unrealistic and that it is at risk of being overtaken by General Motors Co, BMW and other deep-pocketed manufacturers that are ramping up their own electric-vehicle offerings. The stock was up 0.86 percent at $337.33.
Sceptics believe Tesla's growth targets are unrealistic and that it is at risk of being overtaken by General Motors Co, BMW and other deep-pocketed manufacturers that are ramping up their own electric-vehicle offerings. The stock was up 0.86 percent at $337.33.
Tech2 is now on WhatsApp. For all the buzz on the latest tech and science, sign up for our WhatsApp services. Just go to Tech2.com/Whatsapp and hit the Subscribe button.