Hi-Tech

Tesla cuts color options to streamline production

Tesla cuts color options to streamline production

Tesla shares lost ground in morning trade after an analyst downgraded the company's stock and called the company "no longer investable", citing CEO Elon Musk's "erratic" behavior.

If Tesla plays its cards right, the $35,000 standard trim Model 3 could very well become a fossil-fuel auto killer. So far, the company has only made premium versions of the Model 3 with long-range batteries.

In a reply to a customer who wanted to know about options to service his Silver Metallic Model X 100, Musk tweeted that service centers will continue to stock parts in each color for owners of cars painted with the soon-limited colors.

Contrary to an emerging Tesla bear thesis that demand for the Model 3 is declining, the analysts noted that the electric vehicle maker is now focused on selling higher-margin cars such as the Model 3 Performance and the Long Range AWD Model 3, where "demand continues to exceed what is being produced". Clearly, as added by experts, Tesla is still a greenhorn when it comes to mass production.

Separately, automotive news website Electrek reported that Tesla is now launching its own in-house "Body Repair centres" to reduce repair time with the first nine locations.

"Moving two of seven Tesla colors off menu on Wednesday to simplify manufacturing".




More than 400,000 people are on a waiting list to buy a Tesla; some have been waiting since March 2016, when the company first started taking orders.

Tesla shares surged Monday after Baird published a bullish note on the company.

"We occasionally adjust pricing and available options to best reflect the value of our products and to streamline our manufacturing operations", a Tesla spokesperson said of the plan to drop some color options. Both said it would be highly unlikely for deliveries to begin in September and more likely for them to begin in 2019. In August, analysts from the investment bank UBS tore apart a Model 3, analyzed its construction, and projected a $35,000 Model 3 would generate a loss of $5,900 per vehicle. "We are anxious that this behavior is tainting the Tesla brand, which in terms of value is most important".

"Tesla is in a cash pinch", Cowen & Co. analyst Jeffrey Osborne said in an interview. The Model 3's base trim, which is expected to cost $35,000 before any options, is still not being produced.

"I think quality has to be their top priority", he said.