Tesla performs ‘whack-a-mole’ with supply difficulties falling for the primary time in two years

July 5 (Reuters) – Tesla Inc (TSLA.O) Wall Street analysts said Tuesday faces a host of hurdles ranging from tough manufacturing to rising inflation that could weigh on profits, Wall Street analysts said on Tuesday. , as the electric carmaker reported a drop in deliveries for the first time in two years.

Affected by China’s COVID-19 lockdown and rising costs, Tesla said Saturday that it delivered 254,695 vehicles in the second quarter, down about 18 percent from the first quarter. read more

Supply chain troubles at the company’s newer facilities in Texas and Germany also hit production, with analysts warning that the problems could dent Tesla’s bottom line. .

Shares of the world’s largest electric carmaker fell 3.4% to $658.50 in early trading Tuesday.

“Tesla’s light has dimmed once again with this latest drop in deliveries falling short of expectations,” said Hargreaves Lansdown analyst Susannah Streeter.

“Tesla is facing a very bad scenario, the quicker one problem is fixed, another one will emerge.”

JP Morgan analysts, who cut their PT on the company’s stock from $10 to $385, said Tesla’s financial and production results could be affected by the problems. company-specific implementation at the automaker’s new plants in Texas and Berlin.

Tesla CEO Elon Musk recently described both factories as “huge furnaces” that are losing billions of dollars. read more

Streeter warned that a worldwide squeeze on the cost of living due to red-hot inflation could weigh on demand.

However, some analysts expect a recovery later this year.

Garrett Nelson, senior equities analyst at CFRA Research, said the Austin and Berlin plants will likely continue to stretch results until they reach higher utilization rates, but expect the block volume will recover strongly in the second half of this year.

Reporting by Eva Mathews in Bengaluru; Edited by Ankur Banerjee and Shounak Dasgupta

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