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Here's how traders are playing the news on Tesla, Delta Air Lines and more

The "Fast Money" traders debated a slate of transportation companies, after a slew of bad news pressured the stocks.

Trader Steve Grasso remains skeptical of Tesla Motors, after the company missed its delivery target for the second consecutive quarter and remains on track to miss its annual target.

"They couldn't produce one vehicle and they can't produce three any quicker or any more effectively or efficiently," Grasso said, adding that if an investor wants to own the stock, they should keep an eye on the near-term highs and lows.

Shares of Delta Air Lines closed 3 percent lower on Tuesday, after the company lowered its outlook for passenger unit revenue and profit margins. Trader Tim Seymour said, however, he thinks that the market move is primarily due to valuation.

"There's a lot of waste and fat and headwinds into this number," Seymour said. He added that he got out of the stock last week, but would get back into it if there was a major sell-off from this level.

Trader Brian Kelly said that he is "staying away from the airlines altogether" because the price action in Delta is "symptomatic of what's going on in the airline space." Kelly said that if he wanted to be invested in the sector, he'd rather own Boeing.

Trader Guy Adami said that the transportation sector in general is in a down trend. He pointed to the iShares Transportation Average ETF, which is down 8 percent in the past year.

Disclosures:

Tim Seymour

Tim Seymour is long APC, AVP, BAC, BBRY, CLF, DO, EDC, EWZ, F, FCX, FXI, GM, GOOGL, GRMN, GE, INTC, LQD, M, MCD, MPEL, NKE, RACE, RAI, RH, RL, SINA, T, TWTR, UA, VALE, VZ, XOM. Seymour is short SPY, XRT. Seymour's firm is long ABX, BABA, BIDU, CLF, EWZ, F, HD, KO, MCD, MPEL, NKE, PEP, PF, SAVE, SBUX, SINA, VALE, VIAB, WMT, WEN, YHOO and short HYG, IWM

Brian Kelly

Brian Kelly is long Bitcoin, DDG, GLD, MOS, POT, SLV, XME, US Dollar UUP. He is short WTI crude, Swiss franc, euro and Japanese yen.

Steve Grasso

Steve Grasso is long BA, CC, EVGN, JCP, KBH, MJNA, MU, OLN, PFE, PHM, T, TWTR, GDX Grasso's Kids Own EFA, EFG, EWJ, IJR, SPY. No Shorts. Stuart Frankel & Co Inc. and some of its Partners are long JCP, AAPL, LDP, WDR, AVP, CVX, FCX, IBM, ICE, KDUS, KO, MAT, MCD, MJNA, NE, NEM, OLN, OXY, RIG, STAG, TAXI, TEX, TITXF, URI, VALE, WDR, WYNN, ZNGA, CUBA, HSPO, ICE, AMZN, MJNA, TITXF, NXTD

GUY ADAMI

Guy Adami is long CELG, EXAS, GDX, INTC. Guy Adami's wife, Linda Snow, works at Merck.