Tesla came up short despite an end-of-quarter production surge that saw engineering chief Doug Field exhort employees to "prove a bunch of haters wrong" by shifting internal resources toward the Model 3 line in order to push Model 3 production beyond 300 cars per day.
Shares of the Palo Alto, California-based company, which have fallen around a fifth in value in the past week, jumped 6.4 percent in premarket trade in NY. This includes both production delays and the delay of high-profile options such as all-wheel drive and the standard battery which will finally enable the Model 3 to hit its highly touted $35,000 price tag.
The issue has not led to any accidents or injuries and doesn't impact the Model X sport utility vehicle or the more affordable Model 3.
"Maybe Elon Musk switched staff from Model S and X to Model 3 to get better production numbers for Model 3", NORD/LB analyst Frank Schwope said.
The electric auto maker on Tuesday announced that it produced 34,394 vehicles during the first quarter, a 40% increase over the fourth quarter and its best quarter ever.
Musk made a similar statement to relieve doubts a little more than a year ago when Tesla was facing questions about the cash it had been burning through as the company was scaling up for the Model 3. The company claims it took five years to achieve this rate of production with the Model S and Model X, but only nine months with the Model 3.
The route of the fatal crash involving a Tesla Model X last month, in which the vehicle struck a highway crash attenuator head-on while the Autopilot semi-autonomous driver assist system was engaged, . "If this rate of growth continues, it will exceed even that of Ford and the Model T". A small number of those workers were invited to voluntarily help build Model 3 cars instead.
The Model 3 output is a four-fold increase over the last quarter.
Failure to meet targets and pressures on funding prompted Moody's downgrade last week, saying that Tesla was likely to raise more than $2 billion in new capital, partly to cover about $1.2 billion in convertible bonds due by March 2019. JPMorgan's Shawn Quigg advised clients to use some of the profits on the TSLA sale to "purchase Tesla June 100 strike puts for $2.01, indicatively ($252.48 reference price), as we believe the market is underpricing Tesla tail risk". This is reflected in the overwhelming delight experienced by our customers with their Model 3's.
The news isn't entirely rosy as Tesla confirmed nearly all Model 3 cancellations have been the result of delays.
We would like to thank our customers, suppliers and investors for their continued patience and belief in Tesla.