Goldman Sachs Analyst Says Tesla Model 3 Will Be Delayed

4 months ago by Eric Loveday 57

Tesla Model 3

We should be seeing the first Model 3s on US roads this summer!

Despite Tesla’s insistence that the Model 3 is on track for launch starting this July, with volume production set for September, there are still some naysayers out there who counter Tesla’s claims.

One of those naysayers is David Tamberrino, a Tesla analyst at Goldman Sachs.

According to Tamberrino, Tesla will not launch the Model 3 on time. This belief led Goldman Sachs to downgrade Tesla stock. In his note to clients, Tamberrino wrote:

“Ultimately we see a delayed launch (pushing volume growth out and to the right) and FCF burn rate (necessitating a capital raise before 4Q17) to weigh on TSLA’s shares.”

If the Model 3 is late to launch, Tesla will likely place blame on suppliers for the car. The automaker basically stated this in a few different ways in the past, but still the impact of a late launch will be felt by Tesla and its shareholders will rightly place blame on the automaker for failing to deliver on its promise.

There’s still some time though, so let’s hope Tesla can prove the remaining naysayers wrong.

via Electrek

 

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57 responses to "Goldman Sachs Analyst Says Tesla Model 3 Will Be Delayed"

  1. Lee says:

    So now they are actually publishing Electrek stories… time to perhaps remove this site from my RSS list…

    1. ¯\_(ツ)_/¯ sven says:

      No, InsideEVs wrote their own article and attributed/credited Electrek as the source and put in a hyperlink to Electrek’s source news story. Websites often get news items from other websites, then write up their own version of the news story. Websites with journalistic integrity cite the source website for the story and provide a hyperlink to the source story.

      Electrek gets plenty of their news stories from other websites, but they often don’t cite the source and don’t provide a hyperlink to the source story, because they’re scumbags with no journalistic integrity and don’t give credit where credit is due.

      InsideEVs broke the story and had the exclusive on a child’s letter to Elon Musk prompting Tesla to run a fan-made commercial competition, which included the actual letter from the child to Elon Musk. InsideEVs was the first to run the story, because the child just happened to be the daughter of an InsideEVs writer. InsideEVs was the first and only news outlet to have published this news story, when Electrek picked up it and did their own article on it. But Electrek did NOT give InsideEVs credit as the source of their news story or provide a hyperlink to the original InsideEVs story. In fact, Electrek made to mention of InsideEVs or the fact that the child was the daughter of an InsideEVs writer.

      Perhaps you should complain to Electrek for passing off news stories as their own, and failing to cite the source website and failing to provide a hyperlink to the source of their news story.

      https://electrek.co/2017/03/01/tesla-fan-made-commercial-competition-elon-musk-5th-grader/

      1. James says:

        How do you obtain the hubris to claim you know where Electrek sourced the story?!

        So you call them, “scumbags”?!!

        Sven, you never fail to make yourself out the scumbag yourself. Making such assertions which are truly your own assumptions proves you do not vet that which you claim you know.

        The Loveday story broke in forums, local TV and radio news outlets. If it’s in the public forum, they do not need to cite InsideEVs or anyone else as to where they first caught wind of the story. Since Electrek is primarily a Tesla fan site – it’s perfectly understandable they use all channels online and off to obtain stories for their website.

        Your assertions of their journalistic lack of integrity and professionalism are false. Every EV website I know gets information from all around the web. Less than half of all articles everywhere, including this site – feel it necessary to cite sources if they don’t directly quote that source.

        I know InsideEVs has to vet each photograph and printed word as all do. IEV.com is one of the best at printing sources of stories, photos, data and videos. All good professional sites do so, including Electrek.

        1. ¯\_(ツ)_/¯ sven says:

          James, you should write for Electrek. You’d fit right in. 😀

          1. Nix says:

            sven — James is 100% correct. You are wrong.

            Reuters sources Elon’s tweet as the source, just like Electrek, never mentions insideev’s:

            http://www.reuters.com/article/us-tesla-advertising-idUSKBN1690DL

            Same with Fortune, they also handled it exactly the same a Electrek:

            http://fortune.com/2017/03/05/tesla-commercial-contest-launches/

              1. Nix says:

                The Sun doesn’t mention insideev’s, as source, even when going into as much detail as multiple pictures of the Lovedays, and instead sources Twitter for both Loveday and Elon:

                https://www.thesun.co.uk/news/2992601/girl-10-writes-letter-to-tesla-founder-elon-musk-for-his-help-with-a-school-project-and-gets-brilliant-response/

                BBC does the same:

                http://www.bbc.com/news/blogs-trending-39140180

                In fact, the only thing stopping me from listing literally dozens and dozens more VERY LEGITIMATE news agencies that all sourced Twitter and never mention insideevs is the link limit, and the fact that so many news agencies used the Reuters story or variants of it.

                So either all these new agencies are all wrong — or you are full of bullpucky.

                Sadly, you have ZERO ability to actually admit you are wrong. I’m waiting for your bvtt-hert attacks. Bring it on.

        2. Pushmi-Pullyu says:

          “Electrek is primarily a Tesla fan site…”

          Say what? Only a minority of articles on Electrek are Tesla-related… just like InsideEVs.

          Are you perhaps thinking of Teslarati? Now that is primarily a Tesla fan site.

          And while it’s obvious that Sven went on a long rant about Electrek because it’s a pro-Tesla Inc. site, and not because he actually cares one whit about journalistic integrity — obviously a FUDster like him isn’t concerned about the Truth — I think he does have a point about giving credit where it’s due. I certainly don’t agree that multiple websites or news vendors reporting a story absolves writers or reporters of crediting the original source for a story, where it can be unquestionably indentified. And the source of the story about the girl who talked Elon Musk into creating a contest for Tesla fan-made video commercials most definitely was an InsideEVs article on that subject; an article written by the girl’s father:

          http://insideevs.com/letter-child-prompts-musk-run-tesla-fan-made-commercial-competition/

          1. Nix says:

            “crediting the original source for a story,”

            Sorry, but BOTH stories, the Electrek AND the insideev’s story BOTH quote the primary source of this news item.

            The “News” is Elon’s tweet. And the PRIMARY source of that tweet is Twitter, where Elon posted his tweet.

            Both articles correctly credited the Primary Source of the actual news by posting Elon’s tweet directly from twitter.

            Elon’s twitter feed isn’t some obscure source that you give another site credit for undigging from the depths of the web. Every green car site monitors Elon’s tweets.

            1. Pushmi-Pullyu says:

              Well, you’ve certainly proven your argument, and quite thoroughly. I thank you for spending the time to research this, and of course I concede the point.

              I suppose I should know better than to agree with Sven on anything. 😉

      2. bro1999 says:

        Electrek is an amateur blog. They’ve published articles with blatantly inaccurate headlines, then ignore repeated requests to fix their error. Pure amateur trash.

        1. ¯\_(ツ)_/¯ sven says:

          Last week Electrek wrote a real hack job of a review trashing the Prius Prime saying it was a hybrid and not a true EV, because the ICE came on in EV mode in 20º temperatures. The author claimed the Volt was a true EV because its ICE never comes on no matter how cold the temperature.

          Commentors told the author, who was very active in the comments section, that he was wrong, and that in the 2011 & 2012 Volts the ICE always comes on when the temperature is below 26º and keeps cycling on/off to heat the cabin, and in 2013 to 2017 Volts the ICE comes on below 38º degrees as set in the factory, but can be lowered to 16º in the settings. The author repeatedly deleted their comments, either to save face or he knowingly published a hit piece on the Prius Prime and wanted it to stay that way.

          This Electrek author is indeed unprofessional, has no journalistic intergrity, and is indeed a scumbag, despite what James thinks of Electrek and their writers.

          https://electrek.co/2017/02/27/review-2017-prius-prime/

          1. Nick says:

            Is the article you linked to the one you were critiquing?

            Unless they changed it since you read it, your critique makes no sense. He did not seem to say what you claim he said.

            Weird.

            1. Pushmi-Pullyu says:

              Sven, posting things which simply aren’t true, as pretended validations of his FUDster claims?

              I’m shocked, SHOCKED I say! 😯

            2. ¯\_(ツ)_/¯ sven says:

              Nick, read the comments to the article. The commentor and moderator “llsethj” is Seth Weintraub, the author of the article. Like I said, he deleted comments/sub-threads about the Volt’s ICE coming on in cold weather just like it does with the Prius Prime.

              Here are some examples:
              – Commentor: “Why did you censor and delete my reply to you stating that it’s common knowledge that the Volt ICE engine comes on in cold weather when in EV mode with a full battery? That was a real bush league move. [commentor then lists in detail when the Volt’s engine comes on due to cold temperature, which was previously deleted by the author/moderator Seth];

              – Commentor: Can we (Electrek writers and readers) agree to call only those car which can operate on electrical power ONLY an EV? I’ll concede to allowing hybrids IF they can do some electric only driving!
              Seth: This was my point. The Volt qualifies. Prime does not.

              – Seth: Agree here. Prius was designed to be a Hybrid and by far the best. But the clumsy addition of Plug in equipment is a step back for the car and the brand;

              – Seth: …get a Chevy Volt. That is a solid car and with 50+ miles of EV, you might not ever put gas in it. [someone then pointed out that the Volt, like the Prius Prime, also uses ICE in cold weather].

              1. Nix says:

                I guess when your original post is entirely debunked, just change the subject, eh?

                because when it comes to writing BS the most important thing to remember is…

                *LOOK!! SQUIRREL!!*

                Wait, what were we talking about?

                *sigh*

              2. Bill Howland says:

                Sven you usually make impressive comments on difficult subjects.

                Here you are making a straight-forward comment on anyone who has ridden in a VOLT also understands.

                But hoping that the intelligensia here will give you a break is expecting way too much. Just wanted to let you know your intelligent comments do not fall on deaf ears all the time. Some of us think about what you are saying, not just the obtuse unfairly criticizing you.

                1. Nick says:

                  You guys are super weird.

                  The linked article does not mention the Volt or PiP engine running due to temperature.

                2. Another (Euro) industrial point of view says:

                  I would say that both Sven and Nix do provide very good and educated comments even if most of the time they disagree as regards Tesla.

                  It is worth mentioning it as intelligent commenting is not the norm with all sites in relation with cars, including electric ones.

                  That said I do write stupid comments from time to time on a bad day but do not have the possibility do delete them or modify them on this site.

      3. Nix says:

        Electrek cited an Elon Musk tweet about the issue, which contained this link To StevenL’s twitter site, which cited Bria’s letter, and notes that StevenL works for Insideev’s:

        https://twitter.com/Writer_StevenL/status/837101983341424640

        Do you think the important part of that news story outside of our insideev’s bubble is that StevenL works for insideev’s?

        Or is the big news that Elon Musk made a tweet announcing a contest inspired by a 5th grader’s school project? They reported on Elon’s Tweet making the announcement, and sourced the Tweet, which like it or not IS the most newsworthy part of the story.

        Who the actual 5th grader is isn’t the story. It could have been any random 5th grader. Who the 5th grader’s parent is isn’t the story either. The story is Musk’s tweet announcing the contest, which is what they reported.

        (Sorry Steven, but that’s just the truth)

  2. gizmo84 says:

    I’m no expert; but Tesla has said if a supplier is not ready on time they will just build the parts themselves. it will be at a much greater cost until said supply is ready.

  3. ffbj says:

    Gosh, these guys get paid big bucks for just easy guesses. When a stock is sitting near all time highs, and there are some legitimate questions as to it’s evaluation, especially since they are spending cash like a drunken sailor on a 2-day pass in Hong-Kong, and they are characteristically optimistic about production dates and are usually wrong, it’s doesn’t take a Jesse Livermore to figure their stock is too high-priced. At $280 it was, at $250, still too high but scary to short.

    1. ijonjack says:

      So by putting out Negative news the stock should take a nice hit & come down to where the stock manipulators want it in order for them carry out their usual agenda..

      1. ffbj says:

        In a sense yes, though manipulation is a loaded term. I prefer, influence.
        Tesla is very volatile which means there is a lot of money to be made, both long and short.

        Lots of action, as opposed to a stock like AT&T where it’s not going to move to much one way or the other most of the time.

  4. Mister G says:

    I hope TSLA drops to $120 so that I can buy buy buy

  5. Tech01x says:

    Republishing a week old story? Why?

    And InsideEVs strips off the important parts… Mr. Tamberrino has a ranking of #4,325 out of 4,501 analysts on TipRanks and downgraded his price target from $190 to $185.

    1. Michael Will says:

      Lol, right?

      1. ijonjack says:

        They want to stress the point and push the stock price down ,the stock price is still TOO HIGH and isn’t yet where they need it to be in order to make it work for them…….

        1. Michael Will says:

          Manipulation of this kind should be illegal. But I guess we can all just read between the lines and accumulate more TSLA from whoever wants to sell it to us at a long-term discount. Certainly one way to create cash flow from shorters towards tesla as I may sell some stock at a profit much later and buy a nice tesla homebattery system with it or get the next generation model X 🙂

  6. MDEV says:

    Goldman Sachs is the boss and now more than ever. The thing is that I don’t care if is late, I will wait for my M3.

  7. Taylor S Marks says:

    I’m starting to think that even after I receive my Model 3, I’ll still be reading stories from analysts about how the Model 3 will be delayed.

    1. ijonjack says:

      Manipulation*

  8. pjwood1 says:

    Goldman, Please tell me again how oil is going to reach $200/brl. Then, tell me about the rabbits.

    1. William says:

      Now, that one was good! Thanks.

  9. realistic says:

    Well, this was a favorite story for optimists and skeptics alike, but the wave of importance has been completely attenuated with other items of interest over the past week or so. Tesla’s schedule for the Model 3 is unknowable right now to any of us and there’s been plenty of argument on the matter to wring out and test assertions on both sides.

    For now it’s time for observation that will bear out or disprove speculation.

    1. ffbj says:

      Speculation does not imply inaccuracy as observation does not imply accuracy.
      Some people are simply better at guessing, even with limited amounts of available data, or as you call it speculation. I call it an educated guess.

      1. realistic says:

        Speculation indeed does not imply inaccuracy, but rest assured there is plenty of the inaccurate kind going on. When the speculator states that Wall Street is working against Tesla, that the 2 (count ’em, TWO) mules that have carried journos and enthusiasts equals “production prototypes”, and/or claim that global industry quality standards are optional, I’m prone to downgrade the usefulness of the projection.

        Speaking with neither modesty nor conceit I can state a much better knowledge of complex system integration, project management and manufacturing than most. I can also state a very good understanding of Tesla’s finances and disclosures. I’ll gamble that there is a low single-digit count of forum participants who have been in the business of power electronics design and manufacture and worked with Tier1 and 2 auto parts suppliers while at the same time read the complete S-4 filing for the SCTY acquisition and can peel apart the purchase accounting for the Silevo debacle.

        NOTE: I’m NOT saying I have some superior intellectual gift. The things I mention by example are accessible to most commenters here, but by dint of circumstance or interest most people don’t have the knowledge and subsequent judgment.

        My point is that I’m a damned good speculator and I can say that barring something new and not anecdotal we’re all standing around insisting on the validity of our prognostications. Notwithstanding all the aphorisms such as absence of evidence does not establish evidence of absence, etc., we’re all done here until the next substantive piece comes along.

  10. Nix says:

    #RememberGoldmanSh!ttyDeal

    When you get free financial advice, you get what you pay for. Goldman has a history of publicly saying one thing, and then privately investing exactly the opposite.

    That’s why Goldman was calling Timberwolf a sh!tty deal internally, and then made it a “top priority” to sell that “sh!tty deal” to their own clients!!

    https://www.youtube.com/watch?v=skqU_a51TWk

    1. JR says:

      Thanks for the link!
      This moral from GS is what we should worry about, not sharing an article!
      By the way I read both sites every day

  11. Josh Bryant says:

    GS is one of the big underwriters for capital raises, and I am pretty sure has been on a couple previous Tesla raises.

    Makes me wonder if this is some cat and mouse with the terms on the next Tesla raise.

    1. Nix says:

      That would absolutely be illegal. Beyond the normal lousy morals that I posted, and a straight up violation of SEC regulations.

      The part of their company that services individual client accounts (such as Tesla) is specifically barred by statute from using any of that inside information anywhere else in their entire corporation. A “Chinese Wall” must be maintained at all times between the department that services Tesla’s underwriting, and these analysts.

      I’m the first to say Goldman is sleazy. But even I draw the line at accusing them of publicly and brazenly violating SEC regulations.

      If they were going to violate the law, they wouldn’t waste it on handing out free financial advice to everybody.

      1. Pushmi-Pullyu says:

        I’m with Josh. Goldman Sachs wouldn’t have to use inside knowledge, nor violate any “Chinese wall”, in order to drive stock prices down by making negative predictions, then buying them up at depressed prices (or recommending that their clients do so), then cashing in when the stock goes back up.

        And I’m not at all convinced that the SEC goes after most violators. From what I see reported all over, this sort of unethical or even illegal stock manipulation is quite commonplace, especially at the larger Wall Street investment firms.

        For example, quoting from the Wikipedia article on Jim Cramer:

        ~~~~~~~~~~~~~~~~~~~~~~~~~~~~
        In March 2007, a December 2006 interview from TheStreet, Inc’s “Wall Street Confidential” webcast stirred controversy after it appeared on YouTube.com. In the video, Cramer described activities used by hedge fund managers to manipulate stock prices—some of debatable legality and others illegal. He described how he could push stocks higher or lower with as little as $5 million in capital when he was running his hedge fund. Cramer said, “A lot of times when I was short at my hedge fund…When I was positioned short–meaning I needed it down–I would create a level of activity beforehand that could drive the futures.” He also encouraged hedge funds to engage in this type of activity because it is “a very quick way to make money.”
        ~~~~~~~~~~~~~~~~~~~~~~~~~~~~

        source:
        https://en.wikipedia.org/wiki/Jim_Cramer#Market_manipulation

        So as I see it, it’s not that the SEC doesn’t want to investigate or charge people with violations, it’s that they’re so overwhelmed with the sheer volume of them that they only have the manpower to go after the most egregious cases.

      2. Josh Bryant says:

        I understand what you are saying. I don’t have any evidence to say that is what is going on. It was a passing thought I threw out for discussion.

        Giving out free advice on the price wasn’t the value I was speaking of, it was more underwriter friendly terms for the raise. (i.e. lower discount to them compared to market, follow on amounts, commissions, etc.) The weaker TSLAs position, the rougher terms they will need to accept.

        Assuming the wall is firmly in place, I could still see the analyst reports used against Tesla in firming up raise terms. It seems like Tesla has been stalling a raise, which tells me the terms being offered are not as kind as in the past. Even if the analyst had no contact with underwriting, I am sure there might have been whispers of TSLA shopping around that could have been heard outside the company.

        I understand the wall to be kept between, but I have seen instances in other industries where this is broken (and not just just by outright fraud). You can have a hard wall, then an employee transfers jobs across that wall. Or internal theft of information across “the wall”. Big companies don’t always have all the players on the same team.

        This analyst team has always been on the sell of TSLA anyway, so not like they switched sides on the report. The price the price target hardly changed, but it was loaded with a strong negative tone. (Maybe because the recent run-up is against their prediction)

        [This was a bit patchwork and ramble, my apologies. I am out of gas for tonight.]

        1. Nix says:

          Well, if you are saying it might be the analysts acting purely on their own without communicating directly with their services side, that would indeed be a different story.

          Still sleazy, but enough on the legal side of sleazy that like you say, they would avoid an outright blatant public violation of SEC regs.

          1. Pushmi-Pullyu says:

            Sleazy seems to be standard operating procedure at GS. After all, they were one of the companies most heavily involved in selling junk mortgage securities which were fraudulently over-rated, a situation which was one of the primary causes of the financial crisis which lead to the Great Recession.

            See, for example, “Goldman Sachs Finally Admits it Defrauded Investors During the Financial Crisis”

            http://fortune.com/2016/04/11/goldman-sachs-doj-settlement/

  12. Four Electrics says:

    This article’s incredulous tone carries with it an implicit premise, namely, that Tesla’s estimates are credible. This has never been the case, most recently with the X, but examples are legion. Tesla has every motivation to emit propaganda, and a record of the same. Elon’s borderline lies betray a contempt for the intelligence of everyone but himself. With that, the question then becomes: why believe Tesla this time?

    1. Pushmi-Pullyu says:

      Not to say that you are wrong on your main point, but comparing the Model 3 rollout to the Model X delay is a very poor comparison. I’d say it’s more of a contrast than a comparison.

      Due to heavy investment in tooling up for Model 3 production and in building out Gigafactory 1, Tesla will lose quite a bit of money for every month of delay in getting the M3 into production.

      This most certainly wasn’t the case for the MX. Quite the contrary, there’s a reasonable case to be made that Tesla may have intentionally delayed the debut of the Model X because with limited battery supply, they were better off selling more Model S’s, for which much of the initial development and tooling-up costs had already been amortized away, rather than putting a new, and initially less profitable, model into production.

  13. I don’t know, maybe I should just stop reading articles with the word “Analyst” in the title.

    1. Pushmi-Pullyu says:

      Hear, hear!

  14. JeremyK says:

    It’s not fair that suppliers will be thrown under the bus for a launch delay. It takes many months, if not years, to bring a supplier from concept to production. The fact that Tesla doesn’t know how to make a Gantt chart using realistic lead times is not the fault of the supply base.

    1. realistic says:

      Musk’s approach to complex project management is to push impossible dates and then see how well everyone can do to catch up. He has stated this himself in public, to the point that he bemoans the inability to keep the “real” date a secret. This is why Tesla supplier management is a “whack-a-mole” routine.

      This works fine if your business is built around a bunch of young and hungry geniuses who sleep on futons under their desks in pursuit of option awards, with product introductions consisting of buggy apps that can be patched and fixed with tolerant early adopters.

      The Hoerbiger situation (Musk’s culprit in the FWD mechanism disaster) tells you how much Tesla was likely at fault in the mismanagement of this system integration and how Musk’s disdain for the industry is the problem. Hoerbiger reacted vigorously, and in a very short time, as these things go, suddenly Tesla changed counsel and the issue was settled confidentially.

      Frankly the suppliers don’t care too much about Musk’s pontifications as long as the prospect for payment is sufficient. Hard to know how much of the ABL is tied up in Letters of Credit, but I’m betting there are some encumbrances, especially from suppliers from outside the US.

      1. Nix says:

        realistic, yes Elon has publicly said many times that July is the happy path. But it is not correct to imply that all Tesla is doing is setting dates and then crossing their fingers. Tesla has instituted a number of changes in their supply chain for the Model 3 that are new compared to the S+X. These include:

        1) Going in-house with a much larger percent of parts, reducing the number of suppliers.

        2) Encouraging suppliers to locate production closer to Tesla, shortening the supply chain. The prime example is batteries built in Nevada instead of in overseas like other car makers. But that is just the one of many examples, such as South Bay Solutions, A&P Solutions, etc…

        3) Tesla has changed how they interact with suppliers. Instead of simply accepting the progress reports of supplier sales managers, Tesla (sometimes including Elon himself) is going directly to the factory floors and working directly with the people doing the manufacturing to confirm progress. Even using exit provisions in their supplier contracts to end contracts with suppliers who fail to make progress.

        etc…

        I’ve posted sources for all these before (ibid). Tesla has become very, very involved with the supply chain. They aren’t just throwing out dates and then sitting back and doing nothing.

  15. leafowner says:

    Only time will tell……I wish they would remain on-time but it would not be the end of the world if the launch is delayed — as long as the quality of the product is sound I am willing to wait.

  16. Kevin Khan says:

    Thanks goldman quacks for this unbiased article based on nothing……….. SN1 rolled off the factory line July 8. I hope your garbage company was part of the fools that shorted TSLA and lost 6 billion in the first 6 months of 2017. Did I say your garbage? No wonder you needed a bailout in 2009 with garbage assessments like this. lolz

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