Colin Langan Expresses Doubt On Tesla's 2018 Production Guidance

Colin Langan of UBS was a guest on Bloomberg TV to offer his take on Tesla Motors Inc TSLA's 2018 production guidance of 500,000 units.

Langan began by pointing out that 500,000 units implies a production rate that's 10 times greater than last year's total output. As such, this represents a "pretty massive ramp" over a "short period of time."

Langan added that a 500,000 production rate is likely the maximum capacity for Tesla's factory. In addition, the company's Gigafactory plant isn't yet fully online, implying Tesla's target is "very challenging" and "most people on the Street have their doubts if they can achieve that."

Related Link: JPMorgan Doubtful Tesla Will Hit Production Numbers

Langan also suggested Tesla's credibility and timeline is "questionable" given Tesla's history of mis-executions including a "poor" ramp of the Model X.

Moving on, the analyst suggested Tesla would likely need to raise around $2 billion to address an anticipated cash burn over the next year and a half.

Finally, Langan reiterated his Sell rating on shares of Tesla following the reveal of the Model 3 sedan as the next year or so until the release of the new vehicle will be a "challenge."

Shares traded recently at $208.49, down 3 percent on the day.