Tesla to Temporarily Shut Down Production Of Older Models – Report

Tesla will put a halt on production of its high-end Model S sedans and its luxury model X SUV lines for 18 days starting on December 24, according to CNBC.

The S and X lines are older models and only accounted for around 11% of deliveries in the third quarter, with the newer Model 3 and Model Y versions making up the rest.

Tesla (TSLA) CEO Elon Musk informed employees working on those production lines at the Fremont, California factory on Friday that they were being offered one full week of paid leave, and were encouraged to try and find work in other areas of the factory, or alternatively, to “volunteer” to assist the company in making deliveries to customers during the shutdown.

Tesla announced in October that it was recalling nearly 50,000 Model S and Model X vehicles in China over potentially unsafe suspension issues. Further questions arose in November when Tesla declared that it was refunding some Model S and Model X owners and extending its warranty due to touchscreen blackouts and other problems.

When questioned by CNBC about Tesla’s intentions regarding the Model S and Model X lines during the shutdown, Tesla failed to immediately offer a response. (See TSLA stock analysis on TipRanks)

Goldman Sachs analyst Mark Delaney recently upgraded his rating on the stock to a Buy and increased his price target from $455 to a Street high target of $780 (28% upside potential). He believes that EV penetration will happen quicker than he first projected and that EV sales will account for 15% of new car sales by 2025.

Consensus among analysts is a Hold based on 8 Buys, 10 Holds and 7 Sells. The average price target of $392.40 implies a potential decline of around 36% over the next 12 months.

Related News:
Virgin Galactic Aborts Key Test Flight After Motor Failure – Report
Broadcom Beats 4Q Street Estimates; Shares Fall Amid Management Reshuffle
Oracle’s 2Q Profit Beats The Street Driven By Strong Cloud Demand