Published: Thu, April 05, 2018
Money | By Ethel Goodwin

Tesla hit hard by new Chinese tariffs

Tesla hit hard by new Chinese tariffs

The route of the fatal crash involving a Tesla Model X last month, in which the vehicle struck a highway crash attenuator head-on while the Autopilot semi-autonomous driver assist system was engaged, .

The company had been struggling with "production bottlenecks" for the new Model 3 and briefly halted production of the vehicle in February to fix automation issues at its California facility.

Tesla is now making only 975 Model 3s a week - well short of the 2,500-unit rate target by the end of this quarter.

Heading into the final week of the quarter, a Tesla executive urged line workers at the company's sole auto-assembly plant in Fremont, California, to safely ramp up Model 3 output to more than 300 a day and "prove a bunch of haters wrong".

A Tesla spokeswoman based in Beijing wasn't immediately available to comment.

For now, though, Tesla's solar energy business is taking a back seat to the Model 3.

Tesla said it produced 2,020 Model 3s in the past seven days, and expects to produce 2,000 more Model 3s in the next seven days, while the company had promised it would end the quarter making 2,500 Model 3s a week. Reports of early Model 3 deliveries arriving from the factory with larger-than-expected panel gaps, poorly finished paint, and squeaking trim had led some to assume Tesla was trying to pump the cars out too fast for quality control to catch up.

Tesla Motors, Inc. (NASDAQ:TSLA) now has a Weekly Volatility of 7.50% percent while its Monthly Volatility is at 4.35% percent.

Tesla released its much-anticipated production numbers for the first quarter of 2018 this morning, and the results are mixed. Tesla delivered 8,180 of the sedans in the first three months of the year, missing analysts' average estimate for about 8,800 units in a Bloomberg News survey.

Failure to meet targets and pressures on funding prompted Moody's downgrade last week, saying that Tesla was likely to raise more than $2 billion in new capital, partly to cover about $1.2 billion in convertible bonds due by March 2019. Tesla also announced on Thursday the voluntary recall of 132,000 of its Model S luxury sedans because of an issue with a power steering component.

That leaves us with Model 3 numbers: Tesla said it produced 9,766 Model 3 vehicles, up from an abysmal 2,425 it produced in Q4 2017. He's back to sleeping at the factory. "Car biz is hell", he tweeted.

Tesla claimed in its statement that "if this rate of growth continues, it will exceed even that of Ford and the Model T".

The joke ended finally in even worse taste, with a photo of Musk "passed out against a Tesla Model 3, surrounded by "Teslaquilla" bottles, the tracks of dried tears still visible on his cheeks". Among other things, JPMorgan is anxious about the effect further Tesla stock losses will have on the company's ability to refinance the nearly $1 billion of debt coming due in 2019.

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