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Tesla Falls After Analyst Downgrades Rating to Sell

Tesla Motors Inc. (TSLA), the electric-car maker, fell 3.6 percent after a Wunderlich Securities Inc. analyst cut his rating to sell, saying the company probably will reduce third-quarter production of the Model S sedan. The company said it hasn’t altered its production schedule.

The shares slid to $32.15 at the close in New York. Tesla declined 7.3 percent yesterday, its biggest decline since April 4.

Tesla will pare third-quarter output of the Model S to 500 from 1,000, Theodore O’Neill, a Wunderlich analyst wrote in a report, citing the company. O’Neill lowered his 18-month target price to $28 a share from $49. The analyst had recommended buying the stock.

“Tesla wants to be sure the cars are right and apparently they are not in a position to ramp up to get to 1,000 units this quarter,” O’Neill wrote. “While the company is sticking to its 5,000 unit forecast for 2012, how it gets there becomes a second issue for it to resolve.”

At Telsa, “there’s been no change to our production,” Shanna Hendriks, a company spokeswoman, said by telephone.

Tesla, based in Palo Alto, California, wants to become profitable from sales of the Model S as early as next year. Chief Executive Officer Elon Musk has said the company has 10,000 orders for the vehicle and will deliver 5,300 this year and 20,000 in 2013.

To contact the reporter on this story: Hasan Dudar in Southfield, Michigan, at hdudar@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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