Tesla finally reaches Model 3 production goal, CFRA downgrades stock to sell

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Tesla (NASDAQ: TSLA) delivered on its promise to produce 5,000 Model 3 vehicles in a single seven-day span by the end of the second quarter over the weekend.

The victory comes after the company missed its production goal twice before, once at the end of 2017 and again during the first quarter of 2018.

Tesla set the newly accomplished goal of making 5,000 Model 3 sedans a week by the end of the Q2 earlier this year. Originally, the company said it would ramp up Model 3 production to 5,000 sedans a week in 2017, and then on to 10,000 a week in 2018, according to an earlier FreightWaves report. When that goal was not met, the company moved its 5,000 per week target out to the end of the first quarter. The goal was pushed back again in light of battery production issues.

At the time, FreightWaves reported on the heavy dose of media and public scrutiny that followed Tesla’s failure to deliver, including experts urging investors to sell and a subsequent stock drop.

This weekend’s victory could sway some of the negative attention Tesla has received over the last several months, especially if the increased production rate proves sustainable.

“I wonder if we can push production values further,’ Musk said on Twitter after the news broke. “Should be possible.”

Bloomberg published a reformatted version of the celebratory email Tesla CEO Elon Musk sent out to his employees Sunday.

In that email, Musk not only thanked his employees for their hard work and dedication, he also issued an optimistic outlook for the company over the coming months.

He said the company is on track to build 6,000 Model 3s per week by next month. The email included lines like, “I think we just became a real car company.”

Musk’s note also included a nod to the company’s often scrutinized third assembly line that went up under a tent outside the Fremont, California plant earlier this month in a frenzied attempt to increase production before the end of June.

“Intense in tents. Transporting entire production lines across the world in massive cargo planes. Whatever. It worked,” Bloomberg’s reformatted version of the email reads.

Tesla hired additional laborers to work the makeshift line after cutting 9 percent of its workforce in June. The layoff affected employees across all departments, save production workers, according to The Wall Street Journal.

While Musk expressed a positive outlook for his company, CFRA Research downgraded Tesla’s stock from hold to sell Monday.

CFRA Analyst Efraim Levy acknowledged the company’s “Herculean efforts,” but said the 5,000 vehicle per week production rate was not sustainable.

Tesla’s stock was down 2.85 percent at 1:40 p.m. Monday.

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Ashley Coker, Staff Writer

Ashley is interested in the opportunities and issues that arise at the intersection of law and technology. She is the primary contributor to the news site content. She studied journalism at Middle Tennessee State University and worked as an editor and reporter at two daily newspapers before joining FreightWaves. Ashley spends her free time at the dog park with her beagle, Ruth, or scouring the internet for last minute flight deals.