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Tesla Motors Inc (TSLA) Investors React to Stock Downgrade and Tech Hype

Tesla Motors Inc (TSLA) Factory Freemont, California

Tesla Motors Inc has watched shares lose much of their value over the last couple of weeks. Concerns about the electric car maker’s ability to produce, along with the ill state of the stock market and the price of oil, have made investors very cautious of the EV giant’s performance.

Tesla Motors Inc (TSLA) Factory Freemont, California

High doubts about Tesla

Tesla stock took a considerable dive this Tuesday and lost 5 percent during pre-market trading. Hitting $141 before market open, the fall came soon after Barclays pushed the Silicon Valley automaker’s share price target down. Barclays auto expert Brian Johnson reduced the estimate from $180 to $160.

Attention has settled on the production of Tesla’s Model X range as of late. Recent reports show that both investors and analysts doubt Tesla’s capacity to up the rate at which it can push out its Model X crossover. Barclays predicts a Q1 push out of 14,200, down more than 3,000 from the 17,400 produced in Q4.

A number of other issues add a bit of substance to the doubts held by investors too. The last few weeks have seen the company sue one the suppliers of its trademark falcon wing doors. Experts say the doors are extremely complex to manufacture. Such a setback may make it difficult for Tesla to produce its cars at the rate it needs.

“We think the slow ramp may challenge deliveries, cash burn, and margins, while also reminding us of risks in the years ahead to Tesla’s aggressive growth ambitions.” Johnson said in a note.

It is true that many major automakers can often afford to accommodate brief slowdowns in production. However, Tesla Motors currently only has one fully operational assembly plant. A drop in production for the EV giant could deeply hurt its bottom line.

The shares of Tesla have shed around 36 percent of their value over the year to-date. They sat at $147.99 at Monday’ close.

The Tesla tech hype

Although, Tesla Motors does have a few things it can smile about. Adding to the popularity of its vehicles are the many online videos of people showing off the capabilities of their Teslas. Footage has filled the Internet in recent months, depicting the enthusiasm that customers hold over Tesla’s Autopilot, the take-off speed of its cars, as well as the recently introduces Summon feature. Even CEO Elon Musk appeared pretty chuffed about being able to use summon last month.

Some experts are certain that Tesla will soon see a turnaround arise from the pizzazz over its tech. While investors fret over profits, the excitement over Tesla’s vehicles has only grown. Johnson wrote: “We expect interest in Tesla to be reinvigorated amidst a wave of social media attention.”

The EV giant’s lime light is about get brighter this March as it plans to unveil its much awaited Model 3. It will be Tesla’s most affordable car when it becomes available next year. Tesla has assigned the vehicle a price tag of around $35,000, but analysts also doubt that this will be possible.

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