- Goldman Sachs raised its Model 3 production estimates on Monday, but the bank is still incredibly bearish on Tesla.
- CEO Elon Musk sent a news article about the analyst note to the entire company.
- "They are in for a rude awakening :),” he said in an email reported by Bloomberg.
- Follow Tesla’s stock price in real-time here.
Elon Musk is reportedly not happy with Goldman Sachs latest pessimism on Tesla's stock price.
In an email to Tesla employees on Wednesday, the chief executive sent around a CNBC write up of a research note from the bank which said the company will likely miss Model 3 delivery estimates.
"They are in for a rude awakening :)," he said, per Bloomberg.
Tesla has been running like crazy to meet Musk’s stated goal of producing 5,000 Model 3 sedans per week. It even built a massive tent outside its Fremont, California factory to add an extra assembly line to its arsenal. But so far, those efforts haven't appeared to pay off.
"Given cadence from production to delivery, we now forecast the company achieving approx. 22,000 Model 3 deliveries to customers in the quarter—up from our previous 19,000 but below consensus of 28,000," David Tamberrino, the bank’s autos analyst, told clients Tuesday in a note seen by Business Insider. That translates to about 1,700 vehicles per week.
Tamberrino has maintained a $195 price target for shares of Tesla since March — a full 40% below where the stock was trading Wednesday.
Musk has repeatedly lambasted analysts with less-than-favorable ratings for Tesla’s stock. In May, during an earnings conference call, he interrupted two analysts attempting to ask questions about Tesla’s financial situation. Musk later tweeted that he ignored their questions because they "represent a short-seller thesis." He has also warned short sellers, or investors with bets riding against Tesla’s stock price, twice in recent weeks that their position will soon "explode."
Regardless of short positions, most of Wall Street remains convinced Tesla will need to raise capital this year. That directly contradicts with the company’s forecast of profitability.
Tesla is likely to announce its second quarter delivery numbers for the Model 3 as well as its other vehicles shortly after the end of the reporting period, as it has in the past. All eyes will be on the production numbers. Even if the company does reach its goal of 5,000 per week, Goldman Sachs says that may not be sustainable.
"We see the possibility for Tesla to meet the objective, given incremental assembly lines added to the Model 3 program (Grohmann engineering battery module line and an additional general assembly line for the Model 3 at Fremont), and we note that the company has previously reported extrapolated weekly production rates (e.g., derived from several days of production, rather than a full week)" Goldman said.
"However, the question that will remain is how sustainable that run-rate of production is for 3Q18 given the historical volatility of the Model 3 production rate, where Tesla has taken intermittent downtime."
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