Economy

Tesla's share price hits turbulence as electric vehicle giant's CFO departs

Tesla's share price hits turbulence as electric vehicle giant's CFO departs”

CEO Elon Musk revealed the shake-up in the closing minutes of Tesla's earnings call on Wednesday, and the surprise announcement sent the shares tumbling as much as 5.9%.

Profit was down from last quarter when Tesla made 300 million dollars in Q3.

"While the market is busy focusing on Tesla's CFO retirement, which we view as unremarkable, we were very encouraged by Tesla's solid fourth-quarter print and its 2019 outlook calling for strong gross margins and cash flow, despite conservative deliveries assumptions".

Tesla has said that it wants to start production at its Shanghai plant in the second half this year and is aiming to build 3,000 Model 3 vehicles per week.

"It is critical that we continue this trend so that we can keep increasing the affordability of Model 3 while retaining a sustainable level of profitability", the company said.

Whilst definitive plans for Model Y production are still being hatched, the plans for ramping up Model 3 production to 10,000 a week to achieve the goal of 500,000 a year are well underway.

That valuation relies on spectacular growth in the years ahead, but recent price and staff cuts suggests Tesla might find it more hard than expected to deliver that growth profitably. "And it could be a lot more than that, but even with tough economic times to see 50 percent growth is pretty nutty". Tesla's guidance issued earlier in the day projected more modest deliveries of 360,000 to 400,000 units.

The bull vs bear debate is heating up again following Tesla Inc.'s fourth-quarter results.

Tesla was under intense pressure previous year, as it spent rapidly to improve production and get its latest vehicle into the hands of customers. The company says it is snagging customers from beyond conventional notions of its segment.

We last heard about the Model Y crossover mid-size SUV vehicle a year ago and it sounded like it was going to be revealed sooner rather than later.

The departure of Deepak Ahuja as well as missing Wall Street profit targets for the end of 2018, sent Tesla shares down almost 6 percent after hours. Although launching the auto involved a well-documented "production hell", according to Musk, the company expects to produce 7,000 Model 3s per week on a sustained basis by the end of 2019. Reads the filing: "In 2019, full-year Model 3 volumes will grow substantially over 2018 due to a full year of high production rates at our Fremont facility". Currently, China and Europe are being prioritized, so that the company can fill orders there before any tariffs go into effect. "Our auto is very expensive going into China with import duties and the higher cost of labor here".



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