(Bloomberg) -- It’s been a wild ride for Tesla Inc. recently, but production of the Model 3 sedan -- a previous point of concern -- is going swimmingly.
Output of the more mass-market vehicle, a key plank in Chief Executive Officer Elon Musk’s plan to become profitable, is on track and an 8,000 a week production rate is “well within reach,” despite extra spending demands, Evercore ISI analysts George Galliers and Arndt Ellinghorst wrote Thursday in a note. Their report came after a site visit at the company’s Fremont, California, plant this week.
In more of a mixed report on the automaker, Bernstein analyst Toni Sacconaghi raised his target price to $325 from $265, saying the chances Tesla will go private are less than 50 percent.
Tesla produced more than 5,000 Model 3s in the last week of June, working around the clock to hit the mass-manufacturing milestone. The push also included assembling vehicles in a tent outside its factory, raising questions on the carmaker’s ability to sustain that rate and keep up quality standards.
“We are incrementally positive on Tesla having just returned from a 48-hour trip to Tesla’s Fremont facility,” the analysts wrote, after completing three separate tours at the site. “Tesla seems well on the way to achieving a steady weekly production rate.”
The analysts saw nothing that would suggest Tesla isn’t able to produce 5,000 Model 3 cars per week currently and increase that by 1,000 per week “very shortly.”
Evercore forecast Model 3 production of 123,000 vehicles 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 tours.
Tesla shares rose 1.1 percent to $342.50 at 8:30 a.m. in New York before regular trading.
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