Tesla Well Within Reach of Building 8,000 Model 3's Per Week
【Summary】Although Tesla is burning through cash at an alarming rate, it appears that the company has finally overcome what is called ‘production bottlenecks’ that were hampering production of its first mass-market electric car, the Model 3.
Although Tesla is burning through cash at an alarming rate, it appears that the company has finally overcome what it called ‘production bottlenecks' that were hampering production of its first mass-market electric car, the Model 3.
After visiting the electric carmaker's factory, analysts at Evercore wrote in a note that Tesla nearing a production rate of 5 to 6k Model 3's per week, with the pieces in place to increase that number to 7 or 8k cars per week.
"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."
According to Bloomberg's Tesla Tracker, which tracks the Model 3 output using vehicle identification numbers and registration data, Tesla is averaging 5,321 Model 3's per week. The total output of the car is approximately 68,269 units.
The Tesla Model 3
Tesla finally hits its goal of building 5,000 Model 3's per week in the final hours of Q2, Tesla produced 5,031 Model 3 electric cars in the last seven days of the second quarter. This was an important milestone for Tesla, as the target to hit that goal was pushed forward since last year. Tesla CEO Elon Musk said that his company would reach 5,000 Model 3's by June, 2018.
Evercore had earlier forecast production of 123,000 Model 3's during the second half of the year, but the analysts said they may need to boost that by as much as 7 percent to over 131,000 after the tour.
Tesla is counting on the Model 3 to slow its cash burn and increase profitability. When Tesla announced it was taking reservation deposits in March 2016, Tesla received deposits from over 400,000 potential customers eager get one, indicating the demand for the lower-priced electric car.
The news about Tesla increasing production comes as the company is under scrutiny from U.S. regulators.
Musk publicly tweeted last week about taking the company private and saying the funding was already secured. The public tweet sent shocks on Wall Street drawing lawsuits and attention from U.S. regulators who served Tesla a subpoena for the surprising disclosure of critical company news.
Musk's statement caused a sharp drop in the company's share price.
Before Musk's tweet on August 7, Tesla shares were trading at $379.57. As of today, Tesla's share price is $335.92, down $43.65, a drop of nearly 9 percent.
Originally from New Jersey, Eric is an automotive and technology reporter specializing in the high-tech industry in Silicon Valley. Eric has over fifteen years of automotive experience and a B.A. in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the automotive industry and beyond. He has worked on self-driving cars and as a technical writer, helping people to understand and work with technology. Outside of work, Eric likes to travel to new places, play guitar, and explore the outdoors.
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