Investors Turn Bearish on Tesla Due to Delivery Rate

Tesla Inc. (NASDAQ: TSLA) has fallen 8 percent in the past week due to investors beginning to shift into a bearish position for the electric automotive manufacturer. Concerns are rising due to the company’s production issues with the Model 3, leaving investors to exit their positions.

But some analysts remain positive for Tesla.

Boris Schlossberg told CNBC, director of FX strategy at BK Asset Management, says that the company’s fate lies within whether the company can deliver, but also taking investors will need to take a leap a faith for Tesla.

"The car itself is so great that if you can just unleash it onto the populace and demand fills what it's supposed to fill, all of those problems will go away," Schlossberg said Wednesday on CNBC's "Trading Nation." "So in some ways, it's sort of the ultimate faith stock and you have to just be a huge believer. … If you are, then it's probably a great buy here because it will recover."

Dennis Davitt of Harvest Volatility Management points at two problems that can also lead investors into a bearish position.

Davitt said on CNBC that “As rates keep climbing higher, that’s going to be a problem for Tesla.”

Tesla is already taking reservation fees for vehicles that have not even been deliver. Tesla began to take reservation fees for its Model 3, then began to take it once the Roadster and semi truck were launched at a showcase.

Davitt is saying that Tesla is borrowing money from customers when the company is already facing debt from its productions, which leads to Davitt’s second point. He says that the as customers reserve Tesla vehicles, he fears that the company will manufacture what is expected, especially for its electric semi truck.

Davitt says that the battery for the electric semi could be a huge problem for drivers, as it requires long hours of charging, but truck drivers need to be moving in order to make money and deliver products. He says the time the truck is idle will take hits to companies who use the Tesla semis.

In November, data was compiled that showed Tesla burns through nearly $8,000 a minute or nearly half a million every hour due to ongoing operations. Data showed that Tesla is on track to deplete its cash by August at this rate.

Tesla is expected to burn through nearly $1 billion per quarter just due to Model 3 productions alone. The expenses that the company burns through raises huge concerns for investors, but what’s worse is that company has yet to deliver what it promised.

Even with the reservation fees, Tesla still won’t expect to generate profit until operations and production are running smoothly and consistently. Without any “bottleneck issues” is the only way Tesla can turn the company back around.

Other problems Tesla faces promising customers vehicles too far in advance. Tesla ran into the problem after it announced the Model 3. Thousands and thousands of customers reserved Model 3s even though they never saw the product, but just heard it was an affordable electric vehicle.

Elon Musk, CEO of Tesla, had promised customers that a set amount of Model 3s will be delivered at certain dates, but Tesla had failed. In the third quarter, Tesla deployed only 222 Model 3s, which was 80 percent lower than what the company had promised.

Now, Musk revealed plans that Tesla is going to make an electric pickup truck after the Model Y is finished.

Musk and Tesla need to stop jumping far ahead into the future by promising customers, which seems to be a recurring problem.

Tesla shares are up 47.5 percent year to date.

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