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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.

Go deeper

1 hour ago - World

U.S. strikes Iran-backed militia facilities in Syria

President Biden at the Pentagon on Feb. 10. Photo: Alex Brandon - Pool/Getty Images

The United States on Thursday carried out an airstrike against facilities in Syria linked to an Iran-backed militia group, the Pentagon announced.

The state of play: The strike, approved by President Biden, comes "in response to recent attacks against American and Coalition personnel in Iraq, and to ongoing threats to those personnel," Pentagon press secretary John Kirby said in a statement.

Senate parliamentarian rules $15 minimum wage cannot be included in relief package

Photo: Al Drago/Getty Images

The Senate parliamentarian ruled Thursday that the provision to increase the minimum wage to $15/hour cannot be included in the broader $1.9 trillion COVID relief package.

Why it matters: It's now very likely that any increase in the minimum wage will need bipartisan support, as the provision cannot be passed with the simple Senate majority that Democrats are aiming to use for President Biden's rescue bill.

Dave Lawler, author of World
1 hour ago - World

Biden's big Saudi reset

Mohammed bin Salman. Photo: Ryad Kramdi/AFP via Getty

President Biden spoke with Saudi Arabia's King Salman this evening ahead of the release of a CIA report expected to implicate the king's son, and the kingdom's de facto ruler, in the murder of a U.S.-based journalist, Jamal Khashoggi.

Why it matters: In one month, Biden has ended support for the Saudi war effort in Yemen, frozen a large arms deal and snubbed Crown Prince Mohammed bin Salman (MBS) by declining to speak with him directly.