Tesla Motors (TSLA) Trades Higher; Barclays Says Model 3 May Boost Stock


The shares of Tesla Motors Inc (NASDAQ: TSLA) are trading higher today driven by the statement of an analyst at Barclays Plc (NYSE:BCS) that the launching of the Model 3 vehicle may help boost the company’s stock price.

The stock price of Tesla Motors was up nearly 2% to $150.93 at the time of this writing around 11:48 in the afternoon in New York.

In a research note to investors on Tuesday, Barclays analyst Brian Johnson said Tesla Motors is expected by investors to provide more details about the Model 3 on Wednesday, when the electric car manufacturer reports its fourth-quarter financial results.

Johnson expected Tesla Motors to maintain its previous statement that the production of the Model 3 will start on the latter part of 2017.

The electric car manufacturer will likely introduce the Model 3 in late March “and there won’t be a lot of details revealed, but we do expect a concept car, not just photos or drawings. We expect interest in Tesla to be reinvigorated amidst a wave of social media attention,” said Johnson.

Investors have been bearish on Tesla Motors

Yesterday, the company’s shares were down 9% and closed at its lowest trading price since January 14 due to concerns that the declining gasoline prices could reduce the demand for electric cars.

The electric car manufacturer lost almost 37% of stock value year-to-date.  Investors have been bearish on the stock because they are concerned whether Tesla Motors has the ability to efficiently produce sufficient number of its new Model X sports utility vehicle.

Tesla Motors production target

CEO Elon Musk is expected to provide an update on how many cars the company expects to deliver this 2016, during its earnings report on Wednesday. He previously stated that their target was to produce 1,600 to 1,800 Model S and Model X units per week this year.

In a research note on Monday, James Albertine, an analyst at Stifel Nicolaus & Co., said, “Our sense is updated guidance may be lower than the 80,000 to 85,000 implied for 2016 by the weekly production rate, which could further sell-off in shares.”

Tesla Motors aims to deliver 500,000 total vehicles by 2024, but it appears that it would be difficult to achieve that target since the gasoline prices are now hitting below $2 a gallon, according to Kevin Tynan, an analyst at Bloomberg Intelligence.