Tesla: Here’s a List of Difficulties Slamming Production Now
Shares of the electric car manufacturer Tesla (NASDAQ:TSLA) are under siege. On Tuesday morning, after warning that it had fallen behind on its production goals for the Model S sedan, the company cut its sales target for 2012 and announced a follow-on offering of 4.34 million shares of its common stock. Stock prices fell almost 14 percent when the news broke.
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The Model S sedan, the company’ second vehicle, began production in June of this year. According to its filing with the U.S. Security and Exchange Commission, as of September 23, the company had produced only 255 of the vehicles. In the filing, Tesla said the company had increased production more slowly than anticipated, and was therefore, “approximately four to five weeks behind our previously announced Model S delivery goals as of the end of 2012.”
Because of the slower-than-anticipated production, Tesla lowered its projected revenue for 2012 to between $400 and $440 million and estimates it will make 300 Model S cars in the third quarter, not 500.
Tesla also disclosed in the SEC filing, that it has tried push back payments on the $465 million loan it received from the U.S. Department of Energy in 2009. As of May, the company had drawn about $360 million of the loan.
Alongside the company’s downgraded short-term production targets, Telsa has opted to issue more stock. According to Monday’s closing price of $30.66, Tesla’s proposed offering of 4.34 million shares is valued at $150 million. Currently Chief Executive Officer Elon Musk owns 26 percent of the company’s stock and has agreed to buy up to $1 million of the offering. Tesla said the proceeds will be used for “general corporate purposes.”
Toyota (NYSE:TM) announced it would be scrapping plans for the sale of its new all-electric minicar on Monday, citing a difficult market and the questionable ability of still-emerging battery technology to meet consumer demands.
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