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Ben Geman Apr 10
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A pessimistic Tesla forecast

Tesla
Close up of Tesla logo on a charger at a Supercharger rapid battery charging station. Photo: Smith Collection/Gado/Getty Images

A new Goldman Sachs research note suggests that Tesla is not equipped to meet its upcoming targets for production of the mass-market Model 3. The analysis led by Goldman's David Tamberrino also sees erosion of the stock price that regained momentum last week when Tesla reported its latest production and delivery data.

Why it matters: It paints a daunting picture of headwinds the Silicon Valley automaker faces as it tries to scale up production of the car that is key to the company's long-term future.

Tesla hopes to reach production of 5,000 Model 3s per week by mid-year after reporting that it made over 2,000 during the final week of the first quarter. But the Goldman note states: "[W]e believe the sustainable production rate for 2Q18 is most likely below the 2,000 vehicle mark the company achieved in the final week of the quarter."

One level deeper: They say the company can likely produce around 1,400 per week sustainably right now, which they note is better than their previous forecast but also implies bottlenecks at Tesla's Fremont, California factory.

They see other headwinds too, arguing that demand for other Tesla models will be "challenged" going forward as Tesla cars lose their eligibility in the second half of the year for the $7,500 consumer tax credit, which is capped at 200,000 vehicle sales per automaker.

  • The note predicts that Tesla will have to return to capital markets to raise more money this year.

All told: The analysis is cold water on the company that saw its share prices climb again beginning last week. "We maintain our Sell rating, and our 6-month price target becomes $195," they write. Tesla is currently trading at around $304 per share.

Mike Pompeo’s first foreign trip

Mike Pompeo
CIA Director Mike Pompeo testifies on worldwide threats. Photo: SAUL LOEB/AFP/Getty Images

If he is confirmed as Secretary of State tomorrow, Mike Pompeo will embark on his first foreign trip as secretary to Brussels for the NATO Summit, Axios has learned. Bloomberg first reported the contingency planning for the potential trip.

The details: “The acting secretary John Sullivan is ready to go to the NATO summit in Brussels Thursday,” a senior administration official told Axios. “The secretary-designate Mike Pompeo is prepared to travel to the meeting of foreign ministers to reaffirm our commitment to NATO and coordinate the alliance’s response to Russian aggression.”

Editor's note: This story has been updated to reflect the latest developments.

Haley Britzky 15 hours ago
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Cohen is pleading the Fifth in Stormy Daniels case

Michael Cohen walking next to photographers.
Michael Cohen. Photo: Yana Paskova/Getty Images

Michael Cohen is excersising his Fifth Amendment rights regarding his role in the payoff of former porn star Stormy Daniels, according to court papers he filed on Wednesday, CNN reports.

What they're saying: Cohen wrote in the filing that "[b]ased upon the advice of counsel, I will assert my 5th amendment rights in connection with all proceedings in this case due to the ongoing criminal investigation by the FBI and U.S. Attorney for the Southern District of New York." Trump has previously said, "If you're innocent, why are you taking the Fifth Amendment?"