Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


Tesla hits speed bumps in race to conquer auto market

06 July 2016, 09:42

New York - Tesla Motors' goal of shaking up the automobile industry has hit a fresh speed bump as disappointing car production suggests a longer wait before it reaches profitability.

Already facing questions over a fatal crash involving its self-driving system and a controversial proposed merger with ailing solar power firm SolarCity, Tesla has now slashed its 2016 delivery targets after second-quarter output lagged behind expectations.

Tesla delivered just 14,370 vehicles in the second quarter, below the 17,000 originally forecast, according to figures released over the weekend.

As a result, Tesla trimmed its full-year delivery forecasts to 79,000 from the prior range of 80,000 to 90,000.

The revised targets further cloud the record of Tesla and its founder Elon Musk, who has vowed to remake America's roads by mainstreaming the electric cars.

Earlier this year, Musk announced an ambitious goal of producing 500,000 electric cars a year by 2018, which would take in from being a niche producer of luxury sedans to a mainstream competitor in the auto industry.

Tesla shares dropped 1.2 percent Tuesday to $213.98.

"While we are modestly disappointed by the number, we are not shocked," said a note from Deutsche Bank. "This is not the first time Tesla has missed an aggressive target."

Deutsche Bank had projected that Tesla would generate a modest profit in 2016. But it now sees another loss following the disappointing deliveries.

"We are not sure whether Tesla has overcome production challenges," Deutsche said.

- Questions over fatal crash -

The weak figures come on the heels of news last week that US auto safety regulators opened a preliminary investigation into Tesla's Autopilot self-driving technology after a fatal crash in Florida involving a Model S.

Preliminary reports indicated that the crash happened when a tractor-trailer made a left turn in front of the Tesla at an intersection. Tesla said neither the driver nor the self-drive system noticed the truck and the vehicle ran under the truck, killing the Tesla driver.

Some auto experts said the accident showed Tesla was deploying self-driving mechanisms before they are ready.

"My concern is that this was an avoidable accident," said Mary Cummings, who heads the Humans and Autonomy Laboratory at Duke University. "My concern is that this will set the industry back."

Tesla maintains that Autopilot has been extensively tested and improved as problems have been addressed. The Florida accident is the first known fatality in over 130 million miles driven, it said, whereas among all vehicles, there is a known fatality every 94 million miles.

Tesla has also encountered criticism over a proposed $2.7 billion acquisition of SolarCity, renewable energy company in which Musk has a large stake.

The deal, which would unify two companies that together lost $1.6 billion in 2015, has raised questions about conflict of interest because of the involvement of Musk in both companies.

Tesla has said the deal would make Tesla -- bringing together electric cars, rechargeable battery technology, and solar installation -- a leader across all clean energy.

Despite the hits, some analysts are still betting on Tesla and Musk, who is promising success with the launch next year of the Model 3 electric car, which is priced towards the middle market.

"Our investment thesis remains intact," said Trip Chowdhry of Global Equities Research. "Tesla is creating a new industry."

As electric car costs decline, "we continue to believe Tesla has the potential to disrupt the auto industry," Deutsche Bank said.


Tags tesla

Read more from our Users

Nigeria @ 56: Words to my green f...

A leader’s job is not to dictate, but rather to be respected, admired and be a trustee, of the land we love, with so much potential, a land which should be freer than free. Its still a long way to fufilling our destiny! Read more...

Submitted by
Isaac Asabor263
Recession: An opportunity for Nig...

The recession should be seen as an opportunity for the country’s promotion as long as we all collectively conduct ourselves in a patriotic manner, writes Isaac Asabor.  Read more...

Submitted by
Black and White

We want to imitate the whites in everything because we are ignorant of our inherent originality and content. We spend all our Naira to acquire his inventions because we so oblivious of our natural endowments that we allow him have it for free. Read more...

Submitted by
Nate Nat
Adamawa State University Mubi: A ...

ADSU integrity forum has accused the Sunday Joshua Wugira, a lawyer, of adopting unorthodox tactics by abusing his privilege by attacking the integrity of ADSU Vice Chancellor Dr. Moses Zira Zaruwa, writes a News24 reader. Read more...

Submitted by
Abdulsalam Jubril
My Country Nigeria (Part One)

Poetry by Abdulsalam Jubril.

Submitted by
Abdulsalam Jubril
Recession, dearth in leadership a...

Every leader has the opportunity to become great and making himself immortal in the lives and hearts of people for generations to come. Will Mr. President seize this opportunity?, questions Abdulsalam Jubril. Read more...