Tesla should be riding high in a period of incredible and innovation transition. The company is prepping the launch of the Model 3. Predictions are generally high and investors are remaining bullish towards their lofty goals. But, the Tesla stock price is taking a hit. Shares dropped about 87 cents in the last quarter. Industry analysts are predicting an additional 58 cents per share loss in the next quarter for sales above $1.5 billion. In all, the numbers are not encouraging. Yet, investors are eager to stay onboard due to the massive changes sweeping Tesla in 2016.
Confident Tesla investors are encouraging, but they do not to revisit their assessments. Tesla missed their production mark on the Model 3 in quarter one 2016. They were predicting 16,000, and only turned out 14,820. The number does not seem huge (and that is true), but it is a lot given the tight profit margins already in place by necessity.
That may be a small speedbump as Tesla looks bigger. Production has increased to meet Model 3 demands, and Tesla has placed resources into improving the efficiency. This may be why investors are both precarious and confident towards Tesla. It is true that transitions will always result in some form of loss. Not everyone is going to stay onboard. Time has proven that even the best companies facing major changes will see some major switch in Tesla stock ownership.
All of this is not to say that Tesla is a poor investment. The reality is the contrary. Major things are happening with the company. 2016 may be a turning point that proves if all their hard work is going to pay off wonderfully. There are more competitors in the space since Tesla began the development of the Model 3. Google has even entered the space, albeit indirectly, to offer their own answer. Tesla is facing tough odds, but they have momentum and a firm grip on the industry working in their favor. The production realities are tough to bare, but there is a path to make them happen. That is more than can be said for most companies.