Tesla’s CEO Elon Musk confirmed in an email that the electric vehicle (EV) maker’s Fremont car production line is up and running.
According to an Electrek report from Feb. 25, which cited an email from Musk, the Tesla (TSLA) CEO stated, “We are experiencing some parts supply issues, so we took the opportunity to bring Fremont down for a few days to do equipment upgrades and maintenance.”
Furthermore, Musk said that the company’s Model S and Model X are still in “high demand.”
“Fremont production is back up and running as of yesterday and will speed up rapidly to full Model 3/Y production over the next few days. Model S/X production lines are almost done with the retooling and will be aiming for max production next quarter. There is high demand, so we are soon going to need to go back to two shifts. Please recommend friends for recruiting,” Musk noted.
Shares of Tesla fell 8.1% before closing at $682.22 on Feb. 25 after Bloomberg reported that the company had closed the Model 3 production line for two weeks at the company’s manufacturing plant in Fremont, California. Additionally, shares of Tesla were still down by 2.1% in extended trading on Feb. 25.
Recently, Tesla also announced that it will stop selling Model Y, the company’s lowest priced offering, alongside “continued price cuts.” These developments had raised “demand concerns” on the Street. (See Tesla stock analysis on TipRanks)
Following the Bloomberg report, Wedbush analyst Daniel Ives reiterated a Hold rating and a price target of $950. Ives said that he believes the production halt could be more about the global chip shortage than demand problems. The analyst is not “overly concerned that this supply chain and factory disruption changes the overall delivery trajectory for Q1 and 2021” and believes that “there is still some supply of Model 3’s from Q4 in the Fremont lot.”
The rest of the Street is sidelined on the stock with a Hold consensus rating based on 7 Buys, 14 Holds, and 7 Sells. The average analyst price target of $603.83 implies around 11.5% downside potential to current levels.