Tesla will need to modify its manufacturing plans to safeguard its income, according to Wall Street analysts on Tuesday, after the world's largest electric-car producer reported a drop in quarterly deliveries for the first time in two years.
Tesla produced 258,580 vehicles in the April-June period, headed by the world's richest person, Elon Musk.
Teslas largest factory in Shanghai was hit by Beijing's zero-COVID policy, which combined with supply chain snarls at its newer facilities in Texas and Germany, and a rise in costs for battery metals prompted the run-up to a gloomy quarter.
Analysts say expansion into higher volume segments with lower price points presents a greater risk relative to demand, execution, and competition, with the brokerage downping its price objective on the companys stock by $10 (nearly Rs. 800) to $385 (nearly Rs. 30,500).
According to Refinitiv data, the median price objective for the stock is $950 (nearly Rs. 75,200).
Teslas' stock fell 1.6 percent to $671 (nearly Rs. 75,200) before the bell on Tuesday.
According to JP Morgan analysts, there may be reason to believe that company-specific execution problems at the company's new facilities in Austin and Berlin are influencing output and financial results.
Both companies, according to Musk, are massive money furnaces that are losing billions of dollars.
Nevertheless, some analysts anticipate production and delivery volumes to rise towards the end of the year.
Garrett Nelson, CFRA Research's senior equity analyst, believes the Austin and Berlin plants will continue to impact bottom line results until they reach higher utilization rates.
Thomson Reuters 2022