Just weeks after Tesla finally managed to hit their production milestone of 5,000 Model 3 cars a week, demand for their new vehicle has reportedly plummeted.
The ratings downgrade by Needham's Rajvindra Gill cut 3 percent off Tesla's stock price before it recovered to $320.23 a share, a 1.1 percent decline for the day. Nearly a year later, we believe it has doubled and outpaced deposits. They pay the rest when the auto is delivered.
Gill called sales of the Model S and Model X "lackluster", especially with the growing amount of competition from luxury manufacturers.
The wait time for a Model 3 is about 4 months to a year, and base model customers could wait until 2020, Gill said.
Although it might be a rather unusually transparent move, Musk has revealed Tesla's new order breakdown from last week to defeat the claims that demand for the Model 3 is flattening.
Gill also stated that he is "skeptical of demand" for the auto and stated that Tesla's capital structure is "unsustainable" as the company struggles to maintain cash flow. Tesla is banking on Model 3 production ramp-up and sales to turn in its first ever profit, while may analysts continue to doubt that the EV maker can become profitable as it burns a lot of cash in the process. Gill believes that Tesla will spend approximately $6 billion by 2020 and stated that believes Tesla stock is "overvalued" despite it falling by 16 percent from its highest valuation in June of 2017. Musk added that last week, Tesla had 5,000 Model 3 "new net orders". Separately, investors aren't thrilled with founder Elon Musk's antics on Twitter.