Tesla shares dropped by 2.4% in Thursday´s trading session amid worries the electric car maker could be hit by further delays.
CNBC and other US news outlets reported on Thursday that delays and quality issues in the manufacture of Tesla´s new Model 3 could be worse than feared, citing accounts from current and former Tesla employees.
Sources claimed instances where Tesla had been forced to make electric car batteries by hand as well as having to borrow scores of employees from a supplier to help with assembly.
Tesla has been plagued by production headaches involving the new mass-production Model 3 electric car, having previously hoped to raise Model 3 output to 5,000 cars by the end of 2017.
It was subsequently forced to push back the target to the end of March, 2018.
The latest revelations will raise concerns that the California-based company could have to push back the target yet again.
“While I've no doubt that Tesla will eventually work out its Model 3 production problems, the base model will cost Tesla at least mid-$40,000s to build. The company will never deliver more than a token few for less than the current $49,000 lowest-cost offering. Sales will hugely disappoint relative to expectations of over 400,000 a year. And even at those higher prices Tesla will never come anywhere close to its promised [profitability],” said Mark B. Spiegel, analyst at Stanphyl Capital.
It´s been a mixed week for Tesla, with the shares having been hit on Wednesday by concerns over news that federal agencies were gathering information about a car crash in California involving a Model S electric car.
The driver of the Tesla car involved in the incident has told police that the vehicle was on Autopilot when it ploughed into the back of a fire engine that was parked off the main highway.
However, it’s the production delays on the Model 3 that have been the main factor behind Tesla´s share price weakness over recent months.
The shares have lost over 10% since the middle of September.
Last week, however, Tesla was decidedly upbeat on the outlook for its Model 3 as it unveiled the car across showrooms on the East coast of America.
Retailing at $35,000, the Model 3 is Tesla´s first mass-production car, and as such could well turn into a make-or-break product for the company.