Wall Street analysts said on Tuesday that Tesla is facing a series of hurdles ranging from production snags to rising inflation that may hit profits, as the electric-car maker reported a fall in deliveries for the first time in two years.
In the second quarter, Tesla delivered 254,695 vehicles, down 18 per cent from the first quarter, despite China's COVID 19 lockdowns and soaring costs.
The supply chain snarls at the company's newer facilities in Texas and Germany hurt production, with analysts warning that these issues could sabotage Tesla's profits.
The world's largest electric-car maker's shares fell more than 3 per cent, but reversed course to close up 2.6 per cent, benefiting from a rally in growth stocks.
The stock has lost a third of its value this year.
The latest drop in deliveries comes in lower than expected, Hargreaves Lansdown analyst Susannah Streeter said this was a setback to the carmaker's ambitions to stay at the front of the EV pack.
The faster one problem is fixed, the faster one problem is fixed, another comes up. JP Morgan analysts, who cut their stakes by US $10 to US $385, said Tesla's production and financial results could be hurt by company-specific execution issues at the company's new factories in Texas and Berlin.
Elon Musk recently described both factories as gigantic money furnaces that are losing billions of dollars.
Streeter cautioned that the cost-of-living squeeze around the world due to red-hot inflation could have a knock-on effect on demand down the line.
Some analysts believe that there will be a recovery by the end of the year.
Garrett Nelson, senior equity analyst at CFRA Research, said that the plants in Austin and Berlin are likely to be a drag on results until they reach higher utilization rates.