Tesla (TSLA) Shares Move to Session Highs as Ambitious 500k+/Year Production Goal Called into Question

September 30, 2016 11:34 AM EDT

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Tesla (Nasdaq: TSLA) shares are moving to session highs amid another recent 'hit' piece.

Late Thursday, the Daily Kanban published an article on Tesla entitled: Docs Reveal: Tesla’s Production Capacity Limited To Less Than Half Of Its 500,000 Vehicle Target.

The following key points are highlighted in the piece:

  • Air quality permits for the recently-upgraded paint shop at Tesla’s Fremont plant limit the electric automaker’s production capacity to less than half of its targeted rate of 500,000 vehicles per year
  • Tesla says it plans a second expansion of the Fremont paint shop, but has not yet applied for the necessary emissions permit or even put the equipment from its first expansion phase into use.
  • If any future expansion or upgrade increases the Fremont plant’s net emissions by more than 6.5% over currently-permitted levels, Tesla’s paint shop will be required to comply with the extremely stringent Lowest Achievable Emission Rate (LAER) standard.
  • These regulatory conditions present a serious challenge to the volume goals and production ramp forecast Tesla has publicly set for Model 3

Shares of Tesla are up over 1.5 percent Friday.

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