Tesla Inc was reported on Monday to be making 2,000 of its Model 3 sedans per week as shares of billionaire Elon Musk's electric carmaker slid, driven by news a crash in California had involved its semi-autonomous autopilot.
Musk told employees in a company-wide email cited by auto industry blogs on Monday that Tesla had just passed the 2,000 per week rate for the Model 3, a cheaper vehicle seen by analysts as crucial to the company's long-term profitability.
That was short of Tesla's own 2,500 per week target for the end of March, but a big increase on the 793 Model 3s that the company built in the final week of last year. It produced 2,425 of the cars in the entire fourth quarter.
Tesla shares recovered around half of an 8 percent loss as the reports filtered into the market, but were still down more than 5 percent by 1:30 pm ET.
The company declined to comment on the reports.
Shares of Musk's $50-billion dollar venture have been reeling from a triple whammy of probes into the crash, concerns about Model 3 production and nerves over its debt load after a credit downgrade by rating agency Moody's.
With share prices falling across the board in a grim few weeks for US technology majors, Tesla's shares are now down 19 percent this year.
The company's lone outstanding junk bond, worth $1.8 billion and maturing in 2025, briefly dropped two points to as low as 85 cents on the dollar for a yield of around 8 percent on Monday, according to MarketAxess data.
‘It is a combination of a bunch of things (for Tesla) - it is still news of the crash and news that a crash like that is a setback for that autonomous part of the industry,’ said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.
Tesla says it has about 500,000 advance reservations from customers for the Model 3, but manufacturing bottlenecks since the vehicle began to be built last July have delayed production and deliveries to customers, exacerbating Tesla's need for cash.
Failure to meet targets and pressures on funding prompted the downgrade last week by Moody's, which said Tesla was likely to raise more than $2 billion in new capital, partly to cover about $1.2 billion in convertible bonds due by March 2019.
Musk made light of the company's financial situation on April 1, joking in a tweet that Tesla had gone bankrupt.
‘Despite intense efforts to raise money, including a last-ditch mass sale of Easter Eggs, we are sad to report that Tesla has gone completely and totally bankrupt. So bankrupt, you can't believe it,’ the tweet said.
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