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Tesla’s flawed parts may affect its profitability, CNBC reports

Last updated: 22:15 13 Apr 2018 BST, First published: 21:02 13 Apr 2018 BST

Tesla car being repaired
Tesla's shares rose on Friday afternoon

Tesla Inc (NASDAQ:TSLA) CEO Elon Musk replied to a tweet by The Economist in the wee hours of Friday morning stating that the company will be profitable and have a positive cash flow in its third and fourth quarter.

CNBC's report disputed the likelihood of that outcome, sharing photos of piles of damaged Tesla parts outside of a California repair factory.

READ: Tesla shares jump after CEO Elon Musk's late-night tweet

It was reported back in March by CNBC that Tesla had received such a significant number of damaged parts from its suppliers that it had to outsource the reworking to local machine shops. The company has also been making design changes to some of the parts.

In its Vehicle Production and Deliveries report earlier this month, Tesla’s numbers showed that it had missed its quarterly estimate of 2,500 Model 3s per week, the report said.

The company’s high volume of damaged parts combined with the design changes may impact Musk’s prediction for its third and fourth quarter.

Shares of Tesla finished 2.1% higher Friday to US$300.34.

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