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Morgan Stanley Targets Tesla’s Model 3 Production Issues

A much-glorified project of Tesla to offer electric vehicles to the masses is facing another setback. The reason for the same is said to be the production issues with the company’s claimed entry-level car.

Adam Jonas, Morgan Stanley analyst, has pointed out Tesla over issues with the sedan, versions of which are eventually to sell for $35,000.

Jonas stated that the company is making material reductions to the company’s earnings estimates to reveal persistent manufacturing problems with the Model 3. Further, he proclaimed that the challenges in enhancing Model 3 production show the basic issues of vehicle design, the process of manufacturing, and automation levels weighing against the profitability of the vehicle.

However, Tesla declined to comment on the criticism from Jonas.

Jonas explained that Morgan Stanley was reducing its price target for Tesla stock to $291 from $376. It was slightly towering than the stock’s close at $284 on Tuesday. The stock price fell about a 0.5% in after-hours trading to 4.30 PM Tuesday.

Elon Musk, CEO of Tesla, along with the company was forced for two times to admit that the company would not hit its production target for the Model 3. The company is now standing for achieving its target of manufacturing 5,000 cars weekly by the end of June.

Tesla assured earlier this month about hitting that goal. Transportation blog Electrek has revealed that Musk has informed the employees of the company in a message that the organization would be manufacturing 500 Model 3s per day this week.

However, Reuters reported on Tuesday that the company is holding up the production for about six days at the end of this month. This holdup is planned to work on issues to the assembly line of the firm.

Recently, Morgan Stanley has proclaimed that Tesla’s large number of employee base may have political consequences for the company’s survival. It believes that the size of company’s U.S. workforce may lead to a big factor in affecting its long-term survival.

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