Tesla's production break adds to the concerns of Model 3

(Reuters) – Shares of Tesla Inc ( TSLA.O ) fell as much as 2 percent in pre-market trading on Tuesday, a temporary halt in the production of its Model 3 sedan that increased the nerves on the electric car the constant failure of the manufacturer to fulfill its promises on the production of the vehicle.

FILE PHOTO: The first Tesla Model 3 production model on the assembly line in Fremont, California, USA. UU It is seen in this undated photo of Tesla Motors obtained by Reuters on July 10, 2017. Tesla Motors / Brochure through REUTERS

Model 3, Tesla's most affordable sedan, is considered crucial for the future profitability of the company, but so far has failed to meet several production objectives.

The automaker said that the high, the second since February, was to improve automation and systematically address bottlenecks to increase production, a regular movement of automotive companies.

"While temporary suspensions to production, in order to improve engineering / manufacturing line rates, are not uncommon in the automotive industry, particularly during a gradual increase, we believe that the news will once again be taken negatively by the market, provide more honey to the bears, "said Evercore ISI analysts.

The use of robots by Tesla to assemble Model 3 has led to greater complexity and delays, which billionaire CEO Elon Musk acknowledged on Friday in a tweet: "Excessive automation at Tesla was a mistake. precise, my mistake, humans are undervalued. "

According to Bernstein analysts, Tesla has not only automated stamping, painting and welding like most other manufacturers, but has also tried to automate the final assembly. This is where the US electric car manufacturer. UU It seems to have problems.

"Tesla has been trying to run at full speed," said Chaim Siegel, analyst at Elazar Advisors. "He (musk) is sleeping all night on the production floor, I do not think there's any way they intentionally want to slow down production, he tells me something is not right,"

Model 3 production did not reach the target Weekly 2,500 at the end of the first quarter and several Wall Street analysts say they do not think it will succeed in producing 5,000 models 3 per week in the second quarter, as Musk has promised.

"I can not imagine that Tesla could achieve a production of 5,000 cars per week until the end of June," said Frank Schwope, analyst at NORD / LB. "I hope that Tesla will fail (in) his objectives for this year, as they did often."

Tesla shares, headquartered in Palo Alto, California, lost nearly 1 percent for the last time.

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