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Tesla (TSLA) stock ended the week down 4% on Friday as the EV maker missed Wall Street estimates on its third-quarter deliveries, issued a recall, and discontinued a lower-priced model.
The Elon Musk-helmed electric vehicle maker delivered 462,890 EVs during the three months ended Sept. 30. While that was just a nose hair behind the 463,897 Wall Street expected, disappointed investors drove Tesla shares down more than 3% following the report Wednesday. The slight miss marked the fourth consecutive quarter that Tesla has fallen short of analyst forecasts.
The saga continued on Thursday, when the stock dropped another 3% after Tesla quietly discontinued its cheapest EV model. Wedbush’s Dan Ives said the discontinuation of its Model 3 sedan was aimed at removing Tesla’s last shred of reliance on auto parts made in China, given rising trade tensions. The Model 3 Standard Range Rear-Wheel Drive was the last of Tesla’s vehicles to use lithium iron phosphate (LFP) battery cells sourced from China, Ives said. Just two years ago, about half of Tesla EVs used the cheaper LFP batteries.
Separately, Tesla issued its fifth recall for its Cybertrucks this year. Tesla recalled over 27,000 of the silver, spaceship-esque electric pickups due to issues with their rearview cameras, which failed to comply with federal safety standards.
The rough week comes as Tesla has faced a number of high-profile issues over the past year — from safety concerns over its Autopilot feature and mass recalls to factory shutdowns, layoffs, and heightened competition in China. Three senior Tesla executives resigned this spring, and Bloomerg reported Thursday that its long-standing chief information officer, Nagesh Saldi, will also depart the company.
The stock was up 4% at market close Friday as a strong September jobs report lifted the market.
Tesla stock has been on a roller-coaster ride, plummeting after its dismal first quarter earnings report in April, then recovering in July when Tesla fared better than expected in the following earnings period thanks to price cuts.
Now, all eyes are on Tesla’s upcoming robotaxi event, which will either cement Elon Musk’s reputation as an AI leader or cast doubt on his lofty goals.
In a bullish note to investors Friday, Wedbush’s Ives said, "We believe Robotaxi Day will be [a] seminal and historical day for Musk and Tesla and marks a new chapter of growth around autonomous, FSD, and AI future at Tesla.”
“We continue to believe Tesla is the most undervalued AI name in the market and we expect Musk & Co. to unveil some 'game changing' autonomous technology at this event next week,” he added. Ives is part of the 44% of Wall Street analysts who recommend buying the stock. He sees the stock rising to $300 over the next 12 months, much higher than the consensus estimate of about $217, according to Bloomberg data.