Published: Sat, September 15, 2018
Technology | By Lionel Gonzales

Musk mulls Tesla colour choice reduction | Automotive Industry News

Musk mulls Tesla colour choice reduction | Automotive Industry News

Tesla shares lost ground in morning trade after an analyst downgraded the company's stock and called the company "no longer investable", citing CEO Elon Musk's "erratic" behavior.

Here's the scrapped Silver Metallic color on a Tesla Model S.

The turbulent history of Tesla's Model 3 has been well-documented. In April, a fire in Tesla's paint shot was reported to have temporarily stopped vehicle production and damaged two expensive sprayer robots.

Tesla CEO Elon Musk tweeted on Monday night that Tesla would "simplify manufacturing" by removing Obsidian Black Metallic and Silver Metallic from the menu of colors as of Wednesday, possibly so it can catch up on missed production deadlines and fulfill orders already placed by consumers who want to drive its new electric sedan, the Model 3. So far, the company has only made premium versions of the Model 3 with long-range batteries. "Obsidian Black & Metallic silver will still be available at special request, but at a higher price". In fact, as other auto manufacturers such as Mercedes and BMW put their own focus on electric cars, mass production of the Model 3 is essential for Tesla's long-term survival.

A Reuters report said Tesla now offered seven shades.

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Nomura cut its rating on Tesla to "neutral" from "buy", and has slashes Tesla's price target to $300 from $400.

According to Akshay Anand, an executive analyst for Kelley Blue Book, and Jeremy Acevedo, a manager of industry analysis for Edmunds, the timeline listed on Tesla's website is the most realistic. However, buyers can still get a hold of the other tints if they're willing to shell out more money.

Much of that anticipated growth, Musk said, would come from production of the Model 3, Tesla's first affordable vehicle designed for mass production. "We would definitely honor that obligation, and we would do so right now if it were possible", Musk said.

According to Acevedo, the primary reason for the delay is Tesla's quest to become profitable. "We are anxious that this behavior is tainting the Tesla brand, which in terms of value is most important", Shah says in the note, as carried by CNBC. With this statement in mind, it appears safe to infer that by April or Mar 2019, Tesla would be manufacturing the $35,000 base Model 3.

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