Tesla dips as ‘Kilimanjarolike’ profit target looms


SAN FRANCISCO • Tesla Inc shares were poised to fall to their lowest since December 2016 on concerns the carmaker faces a “Kilimanjarolike uphill climb” to hit profitability goals in the second half of the year.

In a note on Sunday, Wedbush analyst Dan Ives described the electric-car maker’s predicament as a “code-red situation” and cut his price target on the stock to US$230 (RM961.40) from US$275.

Ives slashed his target from US$365 just last month. He was once among the most bullish analysts covering Tesla.

Ives said he has “major concerns around the trajectory of Tesla’s growth prospects and underlying demand on Model 3 in the US over the coming quarters”.

Tesla shares fell 3.8% in early trading in New York yesterday, poised to reach their lowest since December 2016, amid broader pressure as trade fears continued to weigh on global equities markets.

The stock closed at the lowest level in almost 2½ years last Friday after Musk called for a “hardcore” review of all the company’s expenses and an analyst warned of potentially severe fallout from a fatal crash involving Autopilot.

Tesla delivered just 63,000 cars in the first quarter (1Q), but expects to deliver 90,000 to 100,000 cars in the 2Q, and 360,000 to 400,000 for the year. Ives said hitting the full year target is going to be a “Herculean task” and sees 340,000 to 355,000 as a more likely scenario. — Bloomberg