Tesla problems for Elon Musk piling up
Challenges are mounting for electric automaker Tesla, as investors become increasingly wary of near-term headwinds facing the company.
Notorious short-seller Jim Chanos told CNBC on Thursday that his hedge fund, Kynikos Associates, is betting against Elon Musk’s brainchild. Chanos even went so far to say that Musk may be “misleading” investors with certain comments, questioning whether the company would be able to meet its production target on either the Roadster or the Semi truck, which are expected to be available for purchase in 2020.
Tesla has been struggling to ramp up production of its Model 3 sedan, which is seen as a critical bellwether of the company’s near-term profitability. The automaker continues to target a weekly production rate of 5,000 Model 3 sedans by the end of the second quarter, despite starting the quarter at a rate of just 2,000 vehicles.
Earlier this month auto news site Electrek reported that Tesla temporarily suspended Model 3 production for a few days to “do a comprehensive set of upgrades,” which is expected to allow for production to increase to a rate of 2,000 to 4,000 vehicles per week by next month. Musk squashed an analyst report midmonth that he would need to raise more funds in order to meet production goals for the Model 3.
In the last three months of 2017, the automaker reported a net lost exceeding $770 million, and any further production misses could hurt revenues further.
Tesla also announced on Thursday that its autopilot chief Jim Keller would be leaving the company after two years. Keller’s departure comes as the company is facing three probes from the National Transportation Safety Board over the safety of its self-driving technology. Last month, a Model X driver died in a crash while the car’s autopilot was allegedly on.
Tesla’s Fremont, California, plant is being probed the state's Occupational Safety and Health Administration, following reports that it failed to disclose serious injuries at the job site. Tesla has denied any wrongdoing.
Despite a myriad of challenges, Musk has at least one high-profile cheerleader in rapper Kanye West, who praised the entrepreneur this week for what he called “the funnest car [he’s] ever driven.”
Shares of Tesla are down more than 9.5% so far this year.