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The recession created by the coronavirus pandemic is likely to help Tesla Inc. TSLA, 0.00% extend its advantage in electric vehicles over the major car markers, or original equipment manufacturers (OEMs), which may be forced to delay their own electric initiatives, Baird analyst Ben Kallo said Friday. Kallo reiterated his neutral rating on Tesla stock in a note discussing the timeline for production to restart at Telsa’s plant in Fremont, California. “We will look for updated commentary on a timeline for restarting production, but do think the company is positioned to manage ~2 quarters of downtime,” said the note. Kallo estimates Tesla’s cash burn for the fi
rst quarter at about $400 million, after it produced about 14.3K more cars than it delivered; the corresponding inventory build could be an overhang, he wrote. “All else equal, we think the inventory build alone could be a ~$500M headwind (inventory valued at the lower of cost and net realizable value),” he wrote. “That said, the inventory build will likely enable TSLA to continue delivering cars despite production downtime in Q2, which we view favorably.” Tesla shares were up 1.3% premarket and have gained 69% in the year to date, outperforming General Motors Co. GM, 0.00%, which has fallen 41%, and the S&P 500 SPX, 0.93%, which has fallen 13%.