LearnBonds.com

Tesla Inc (TSLA) Savages Model 3 “Logjam” Report

Tesla Motors Inc (TSLA) Model 3
Rate this post

Tesla Inc (NASDAQ: TSLA) is working around the clock to get its Model 3 EV ready for mass production, but the firm can’t control every aspect of the process. One small mistake on the other side of the world could set production back weeks. That, according to rumors, is precisely what’s keeping production from ramping up.

JL Warren Capital, which has connections in supply chains in China, says that the center console display is being delayed. Forbes’ Bertel Schmitt initially reported the story.

According to the research house, there are delays in shipments of the screen to California. Because of the length of the journey, and the quality and customs controls in between, that could mean a hefty logjam in Tesla’s Fremont factory. Fortunately for those with Tesla stock, the firm says the rumor is all bunk.

Tesla Inc defends its honor

Tesla really didn’t take the report lying down. When contacted by Forbes, the firm responded “there is no issue with the supply of any aspect of our screens for Model 3.” The stories were, according to the spokesperson, “absolutely false.”

The Warren Capital report didn’t even portray the delay in very strong terms. According to the research Tesla Inc (NASDAQ: TSLA)  got its hands on around 703 screens in the month of July. The firm will, says the note, be limited to a maximum of 70,000 screens in 2017.

Tesla Motors Inc (TSLA) Model 3

That number is far beyond the maximum likely output for the Model 3 this year. Tesla went even further than that, alleging that the report had very basic facts wrong about its arrangements.

“The report mentions Japan Display as the maker of the LCD screens, despite the fact that they are not even a supplier of ours,” the spokesperson said.

JL Warren has been using certain Chinese customs data in order to get a read on Tesla production for some time. Its latest effort, however, appears to be a stretch.

Is the Model 3 really delayed?

It seems really unlikely that Tesla would be forced to greatly delay the Model 3 launch because of a lack of screens. The supply chain problem may, however, cause a slower ramp up in production of the affordable EV.

Tesla Motors Inc (TSLA) Model 3 Source: Tesla
Source: Tesla

“Japan Display (6740 JP) makes the LCD screens for the Model 3. TPK (3673 TPE) and Lens Technology (300433 SHE) laminate the panels. Although we believe that the screen yield issue will eventually get worked out, it currently has delayed the touch screen shipments to the factory in California,” says the report. It’s not clear which part of that chain the supposed delay comes in.

Tesla was pretty adamant, however, that the description of its supply chain was basically wrong. That’s a strong denial, even if from a company trying to defend its interests at a delicate time.

Add that to the fact that the math in report likely would lead to a major Model 3 lag, and it seems this story is well worth ignoring for Tesla Inc (NASDAQ: TSLA) fans.

Whether or not, however, the Tesla Model 3 delay is real remains to be seen. Wall Street is very anxious about the roll out of the car. Shares in the company have lost around 14 percent over the last month as questions are raised about its future.

For the time being, however, those holding Tesla stock should stick to the knowable. Supply chain rumors are nigh impossible to verify. This is one of those cases where it’s better to block out the noise.

Views expressed are those of the writers only. Past performance is no guarantee of future results. Trading comes with severe risk. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Avatar

Paul Shea

Write first comment

Reply

Your email address is not published.