Tesla shares rebound on Friday, Nextmove rejects order for 85 Model 3 cars after dispute over quality

According to a report by Reuters, Nextmove, a German car rental firm, has rejected an order for 85 Tesla Model 3 cars at a total value of EUR 5 million after a dispute related to quality issues.

Tesla shares closed higher for the fifth time in the past ten trading sessions on NASDAQ on Friday. The stock went up 1.99% ($4.30) to $219.94, after touching an intraday high at $222.21, or a price level not seen since August 14th ($231.50).

Shares of Tesla Inc have retreated 33.91% so far in 2019 compared with a 20.13% gain for the benchmark index, Nasdaq 100 (NDX).

In 2018, Tesla’s stock went up 6.89%, thus, it outperformed the Nasdaq 100, which registered a 1.04% loss.

According to Nextmove, 100 Tesla Model 3s were ordered last year, but however, objections over their quality were raised after the company took delivery of the first 15 vehicles earlier in 2019.

There were paint defects, scratches on the dashboard, problematic wiring and wheels as well as condensation in the headlights of Nextmove’s Model 3 vehicles, the German car rental firm said.

Nextmove also said that its reputation for quality would be compromised, if rental clients were offered vehicles with defects.

In response, Tesla said that an issue-resolving process was underway and replacement vehicles had been provided.

“We believe the customer’s decision not to take delivery of its remaining Model 3 orders wasn’t entirely due to quality issues, but was largely influenced by their frustration with an unrelated dispute from earlier in the year,” Tesla Inc said in a statement, cited by Reuters.

Analyst stock price forecast and recommendation

According to CNN Money, the 30 analysts, offering 12-month forecasts regarding Tesla Inc’s stock price, have a median target of $236.00, with a high estimate of $530.00 and a low estimate of $140.00. The median estimate represents a 7.30% upside compared to the closing price of $219.94 on August 16th.

The same media also reported that at least 10 out of 33 surveyed investment analysts had rated Tesla Inc’s stock as “Hold”, while other 10 – as “Buy”. On the other hand, 10 analysts had recommended selling the stock.