The United States biggest electric car company, Tesla Motors Model X sale fell below the analyst expectation forcing J.P Morgan analyst to cut its fourth-quarter earnings expectation by half. The lower sales recorded by the company also cause its stock to drop to its lowest price in Month on Monday.
Based on the initial analyst, Tesla was expected to deliver 4,000 cars in this quarter, however, due to delay in production the company had only managed to complete 3,500 delivery. One of the major issue faced by Tesla include a problem with a manufacturer regarding its car's "falcon wing" door.
According to the Market Watch, the analysts from J.P Morgan, Ryan Brinkman and Samik Chatterjee also expected its profit to be down by half for this quarter causing more investors to sell the stock. According to them, "We estimate that the slower than expected ramp in Model X vehicle production will pressure gross margin."
The revised expected gross margin released by the analyst is 10 cents a share for the fourth quarter compared to the previous 26 cents a share. Although the company's profit has been reduced by analysts, J.P. Morgan decided to maintain its price target for the stock which is $180 per share.
Tesla CEO, Elon Musk is currently planning to open a manufacturing plant for Tesla in China soon to increase its production and meet the growing demand in the region. According to Engadget, currently, there are 15 stores in China selling Tesla and the company had already installed 340 Superchargers and 1,600 destination charger all over China to cope with the growing demand of electric car in China.
The company's most anticipated model, the Model X was originally introduced to for production in 2013 as reported by the International Business Times, however, due to lots of manufacturing problem, it was pushed to late 2015. The Model X has been delivered to just over 200 owners so far including its own executive and early investors.
Tesla spokeswoman told reporters that "Model X deliveries are in line with the very early stages of our Model X production ramp as we prioritize quality above all else, That ramp has been increasing exponentially, with the daily production rate in the last week of the year tracking to production of 238 Model X vehicles per week."
Tesla's stock is currently traded at $196.38 as of Monday close, down 3.1 percent. The company will announce its fourth-quarter earnings on February 10th followed by a question and answer session after the announcement.
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