May 06, 2016 03:01 PM EDT

Tesla's CEO Elon Musk's 500,000 Production Target Spawns Worry For Investors As EV Firm’s Stock Drops

Despite the positive outlook of Tesla Motors CEO Elon Musk, worries and apprehensions are strongly felt by the company investors. It appears that the EV company's goal for 500,000 productions of segments is causing worry for the stakeholders.

Tesla stock dropped 5 percent Thursday as investors expressed scepticisms over CEO Elon Musk's plan to accelerate and ramp up deliveries of its electric vehicles. However, the retreat in Tesla shares comes a day after shares jumped as much as 7 percent and the first-quarter earnings showed a loss narrower than the Street forecast, reports USA Today.

On a call with investors, Musk said that the company planned to accelerate its goal of producing 500,000 cars particularly the entry-level Model 3. The same model has 325,000 $1,000 deposits by two years to 2018, according to the same post.

"Despite Tesla's narrower than expected loss, the company is down $75 million on the quarter and delivering 500,000 units by 2018 may prove to be a tough task," says Mark Williams, an analyst with Kelley Blue Book.

"Tesla collected an estimated $400 million from refundable deposits on the Model 3, but may need to seek out more after announcing a 50 percent increase in capital expenditures. The pressure from building a Gigafactory (battery plant), delivering units ahead of schedule, and replacing valuable resources is going to pose some interesting challenges for the Tesla brand," Williams added.

Jobs & Hire also noted that Tesla has aimed to surpass its former achievements and feats and it has been depicted by the company's desire to promote stunning and sustainng features such as its Bio- Defense Mode.

As Tesla's stocks have dropped, it is understandable that investors and affected stakeholders would worry and voice out their apprehensions. However, for Tesla's CEO Elon Musk, he believes in positive undertakings and aims on increasing and realizing the 500,000 productions in the coming years.

Get the Most Popular Jobs&Hire Stories in a Weekly Newsletter
© 2017 Jobs & Hire All rights reserved. Do not reproduce without permission.
TRENDING ON THE WEB

Join the Conversation

Real Time Analytics