Tesla Inc quashed any speculation it might need to raise more capital this year on Tuesday, driving the company’s battered shares higher as it announced it built 2,020 of its cheaper Model 3 sedans in the last seven days of March, Reuters reports.
The company, damaged in the past week by speculation over its finances and a car crash in California, said it would produce nearly the same number of the Model 3 in the next week and would see output climb rapidly through the second quarter.
“Tesla continues to target a production rate of approximately 5,000 units per week in about three months, laying the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow,” it said.
“As a result, Tesla does not require an equity or debt raise this year, apart from standard credit lines.”
The production numbers, short of Tesla’s own target of 2,500 per week for the end of March, are far above the 793 Model 3s built in the final week of last year.
Quickly ramping up Model 3 production is crucial for the Silicon Valley electric vehicle maker, whose profitability depends on the cheaper sedan. Tesla says it has about 500,000 advance reservations from customers for the car.
Shares of the Palo Alto, California-based company, which have fallen around a fifth in value in the past week, jumped 6.4 percent in premarket trade in New York.
Auto industry blogs - citing an unverified memo - had reported on Monday that production of the Model 3 had passed the 2,000 per week production rate.
Analysts from brokerage Evercore ISI said a run-rate of 2,000 per week, while short of the 2,500 target, was better than most on Wall Street had expected and clearly showed progress versus where the company was at the start of the year.
“We were able to double the weekly Model 3 production rate during the quarter by rapidly addressing production and supply chain bottlenecks, including several short factory shutdowns to upgrade equipment,” Tesla said in the filing.