August 16, 2018 / 3:19 PM / 3 months ago

Tesla on track to make 8,000 Model 3s per week, Evercore says

FILE PHOTO: A Tesla sales and service center is shown in Costa Mesa, California, U.S., June 28, 2018. REUTERS/Mike Blake/File Photo

(Reuters) - Tesla Inc (TSLA.O) is on its way to make 8,000 Model 3 cars per week even as it burns more cash, Evercore analysts wrote in a note on Thursday, following their visit to the electric-car maker’s California facility.

Tesla produced 5,031 Model 3 electric cars in the last seven days of the second quarter, the company said in early July, meeting its long-elusive production target after several hiccups.

“Tesla seems well on the way to achieving a steady weekly production rate of 5 to 6k units per week,” Evercore analysts said after a two-day visit to the Tesla facility.

“In addition, the capex required and constraints that need to be overcome to reach 7 to 8k units per week seem well within reach.”

The company is under pressure to prove it can increase the production of Model 3, its lowest-priced car, amid production challenges and cash burn, as it seeks to become a mass-market automaker.

Evercore had earlier forecast production of 123,000 Model 3s during the second half of the year, but the analysts said they may need to boost that by as much as 7 percent after the tour.

Meanwhile, Tesla Chief Executive Officer Elon Musk last week said he wants to take the company private, creating a whirlwind in the market, drawing lawsuits and attention from U.S. regulators for the unorthodox disclosure of critical company news.

Tesla shares were down 0.6 percent at $336.41 in morning trade on the Nasdaq.

Reporting by Akanksha Rana in Bengaluru; Editing by Sweta Singh

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