Tesla Stocks Down Due To Ambitious Goals, Analyst Predicts 2023 As Its Last Year

Sep 03, 2016 11:00 AM EDT | Mariechris Felipe

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Tesla Motors may be the most popular company in the automobile industry as they just revealed the Tesla Model S, Tesla Model X and a Tesla Model 3 in the making. However Tesla Motors stock is down 3.5% last August 28, breaking below its 200-day and 50-day lines for the first time since July 8. A worrying figure that business analysts believe was due to their ambitious goals.

The entire automotive industry recognizes that Tesla has been a leader of innovation. Some engineers in the industry even say it's the best thing that has happened in the automobile industry over the past 15 years. However, because of this same reason, Tesla stock was down this month. It's future is uncertain and some analyst even predicts its continuous downfall.

"Tesla will disappear as an independent car manufacturer before 2023. It will not become profitable" Marc Sachon, professor of Production and Operations Management at IESE International Business School said.

Tesla has at least three major problems

One: it is not profitable and continues to burn money with their ambitious goals and continuous testing of products. The additional products stemming from its pending acquisition SolarCity did not help too. This is the difference between launching a startup software and a startup in the automobile industry: the latter requires a lot of investment in plant, machinery, etc. reducing margins significantly.

Two: At this time, Tesla has quality problems. Not only does the Tesla model S model lost most of its charm during following a fatal crash of a Tesla Model S in Florida, in which the driver was using the company's Autopilot feature.

Tesla is producing 50,000 cars a year last 2015. And with those numbers, there are still quality problems. Tesla has to produce 200,000 cars a year or more when they start their Tesla model 3. With this mass production, they can not afford any quality problems.

The cars have to go perfect. Tesla is learning that competence core automotive sector is not in engines or designs, but the impeccable management of the supply chain and assembly lines most complex in the world.

Three: at the time that Tesla launched the Tesla Model 3, will have a problem with the distribution. Due to legal restrictions, you can not increase its own dealer network in the US, which is its most important market. If you start to hire external dealers, Tesla will lose even more margin. 

Is Tesla really losing its glamor? Will it last beyond 2023? Only time can tell.

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