Tesla Stock Punished by High Costs and Delayed Production

The interior of the new Polestar 1     Volvo

The interior of the new Polestar 1 Volvo

Tesla Inc.'s first attempt at high-volume production isn't going as well as it hoped. Flagship Harbor Advisors LLC now owns 987 shares of the electric vehicle producer's stock valued at $309,000 after acquiring an additional 4 shares during the period.

"While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp such as this makes it hard to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear", the company said. That, industry experts say, is among the reasons Tesla is nowhere close to its aggressive goal of building 500,000 vehicles annually by next year, a lot of them Model 3s. At least one lawsuit has been filed by investors.

Tesla said it had record net orders and deliveries of its Model S and Model X in the third quarter. Dimensional Fund Advisors LP boosted its position in Tesla by 2.0% during the first quarter. The company said "a handful" of assembly lines had taken "longer to activate than expected".

Tesla acknowledged Wednesday that it would not achieve its previous goal of hitting a production rate of 5,000 Model 3 vehicles per week by the end of the year, instead pledging to do so by the "late" first quarter "based on what we know now".

The company also reported its biggest quarterly loss ever, sending shares down almost 5 percent after hours as the loss was bigger than analysts had expected.

Among investor worries: The Wall Street Journal reported on October 6, citing unnamed sources, that "as recently as early September major portions of the Model 3" were being built by hand.

On the ratings front, Tesla stock has been the subject of a number of recent research reports. The trick is to make the process more automated, which will allow the company to produce more vehicles at a lower cost than more traditional automakers.

The Model 3, seen as Tesla's best long-term hope, is priced at about $35,000, about half the price of its high-end Model S vehicle.

With a simpler, streamlined designed, the Model 3 was created to make the manufacturing process easier.

Shah also reaffirmed his $500 price target on TSLA shares, which suggests a massive 51% upside from current levels.

Despite the production woes, Tesla has still had a phenomenal year in terms of stock performance. Insiders sold a total of 50,992 shares of company stock worth $17,390,505 over the last quarter. The company says it will produce 10 percent fewer Model S and X vehicles to reallocate resources to the Model 3.

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