Tesla (TSLA) share have pared losses after the company announced deliveries for the fourth quarter and updated its production of the mass market Model 3 last night. The latter is much more important to investors.
While deliveries of the Model S and Model X came in a little higher than expected, the 1,550 Model 3 deliveries were roughly half of what analysts were expecting.
What's more, Tesla pushed back its Model 3 production targets for the second time in two months. Tesla originally planned to hit a 5K Model 3 weekly production rate by December, that got pushed back to March when the company reported third quarter results in November. Last night, Tesla pushed that target to June, and said it would hit a 2.5K unit weekly production rate by March.
Elon Musk's initial goals for the company's first mass market EV seemed impossible... and they were. He is the only CEO who consistently misses targets or over promises and under deliveries... and it doesn't result in a significant sell-off in his stock.
There are plenty of Tesla bears: 25% of the float is sold short. Offsetting that, Tesla investors seem to have ironclad faith in Elon Musk's vision to transform the transportation sector.
The company has quite the backlog of planned electric vehicles (Model Y crossover, a pickup truck, a semi truck and a new roadster), but skeptics are more focused on the cash burn and frothy valuation, one that's on par with the incumbents who are moving quickly in to the electric vehicle space.
Will the the Model 3 delays result in significant order cancellations? That seems unlikely given the stength of the Tesla brand and the insatiable demand for the Model S, which has now been on the market for over five years.