Analysts at Wedbush believe longer-than-expected downtimes at Tesla Inc (NASDAQ:TSLA)'s Shanghai and Austin factories will have negatively impacted the electric car marker’s third quarter delivery numbers, which they expect will be released on Monday morning or as early as Sunday night.
“While from a demand perspective we believe Tesla was on track to hit 460,000 to 465,000 in the quarter, the longer-than-expected downtimes of the factories in Shanghai and Austin caused likely about 20,000 units to shift into 4Q based on our estimates,” they wrote in a note to clients.
“The factory downtimes and retooling were all ahead of the Model 3 refresh and Cybertruck production now expected to kick into full gear in the October/November timeframe.”
They expect more factory downtimes over the coming year as Tesla ramps its production, scale and new model releases.
“We are now set to be entering the next stage of growth for Tesla globally with the Model 3 refresh front and center in China and the Cybertruck production set to kick off beginning around Halloween,” they wrote.
They also believe that the majority of Tesla’s price cuts in China appeared to be in the rear-view mirror.
“Despite the noise, we believe Tesla had a relatively strong China quarter and should be on track to a very strong end of the year as demand/price cuts/Model 3 refresh are clearly resonating with China EV consumers,” they wrote.
Further, they pointed to Tesla as a potential winner from the ongoing United Auto Workers union strike against the Detroit Three carmakers Ford, General Motors, and Stellantis.
“We also believe the current UAW debacle in Detroit is shining a brighter light on Tesla as a potential winner domestically from this ongoing cage match as potential EV competition (which has been viewed as a lingering long-term threat to Tesla) from the Detroit Big 3 could be negatively impacted with this major cost ramp now on the horizon when a deal eventually and painfully gets done with Fain and the UAW,” they wrote.
The analysts maintained their ‘Outperform’ rating and $350 price target on the stock. Tesla shares traded at about US$248 on Friday afternoon.
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