Tesla Inc (TSLA.O)
shares headed for their best day in more than two years on Wednesday after
Chief Executive Elon Musk said the car maker was now churning out 500 of its
Model 3 sedans a day and should achieve its 5,000 per week target by the end of
The move overturned around a third of the impact of a rocky few months
for Tesla, which has seen shares fall by a quarter from a peak last September
as it battled with production delays and reports of a series of car crashes.
Speaking at the company’s annual shareholder meeting on Tuesday, Musk
offered teasers for upcoming projects, welling up when he spoke of the
company’s vehicles being made “with love” and said his production lines have
demonstrated the ability to make 3,500 Model 3 vehicles per week.
Tesla’s future profitability hinges on ramping up output of the
affordable sedan but the company has fallen short of a series of targets.
“The market is starting to give Elon the benefit of the doubt that he
will finally meet his production goal even though it is now six months late,”
Tigress Financial Partners analyst Ivan Feinseth said.
In April, Tesla said it was making 2,270 vehicles a week.
Musk himself has also stung Tesla shares by warring with critics and
journalists on social media and recently declining to answer questions from
Wall Street analysts about Tesla’s capital requirements, saying they were
A shareholder proposal came up for vote on Tuesday that required Musk to
give away his chairman role. More than 80 percent of shareholder votes were
against the proposal.
“We have no corporate governance problem with Mr. Musk’s dual titles, as
ultimately it is about delivering the vehicles profitably,” CFRA analyst Efraim
“We do, however, wish to see more discipline with the CEO’s
pronouncements, but don’t expect much improvement there.”
Tesla also showed a design sketch of the upcoming Model Y SUV although
little could be seen in the shadowy image and Musk teased that the car might
not even have a steering wheel, stoking some fans’ hopes that the car could be
He said the vehicle would be unveiled in March and begin production in
2020 along with Tesla Semi and the new Roadster.
Throughout its history, Tesla has repeatedly missed aggressive start-of-production
targets, and auto experts believe that launching production of three new
vehicles within two years is extremely unlikely.
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