Electric vehicle giant Tesla faced a tumultuous week, with its stock plummeting 4% on Friday after missing Wall Street estimates on third-quarter deliveries and issuing a recall. The company delivered 462,890 EVs during the three months ended September 30, narrowly falling short of the 463,897 units expected by analysts. This marks the fourth consecutive quarter that Tesla has failed to meet analyst forecasts.
The disappointment was compounded by the quiet discontinuation of its cheapest EV model, the Model 3 Standard Range Rear-Wheel Drive, which used lithium iron phosphate battery cells sourced from China. According to Wedbush analyst Dan Ives, this move aims to eliminate Tesla’s reliance on Chinese auto parts amidst rising trade tensions.
To make matters worse, Tesla issued its fifth recall for its Cybertruck this year, affecting over 27,000 units due to issues with their rearview cameras. This recall adds to the company’s growing list of high-profile issues, including safety concerns over its Autopilot feature, mass recalls, factory shutdowns, layoffs, and heightened competition in China.
Despite the setbacks, Tesla’s stock rallied 4% on Friday following a strong September jobs report. The company’s upcoming robotaxi event is highly anticipated, with Wedbush’s Ives predicting it will be a “seminal and historical day” for Tesla and cement Elon Musk’s reputation as an AI leader.
However, not all analysts are optimistic. RBC’s Tom Narayan believes the event is unlikely to send Tesla’s stock soaring, citing the long-term nature of autonomous vehicle technology. JPMorgan analysts have a more cautious outlook, giving Tesla an Underperform rating due to concerns over its deliveries and self-driving vehicle ambitions.
As Tesla navigates these challenges, its energy storage business and sale of EV credits are expected to be key growth drivers. But with the company facing intense scrutiny and competition, it remains to be seen whether it can regain its footing and drive growth in the electric vehicle market.
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