Tesla 'real vehicle company' after hitting Model 3 goal, Musk says

3 sedan its first car aimed at the mass market is displayed during its launch in Hawthorne California

Tesla 'real vehicle company' after hitting Model 3 goal, Musk says

Production issues surrounding the Model 3 - heralded as Tesla's first "mass market" auto - have plagued the company since the vehicle's launch.

Tesla produced 5,031 Model 3 electric cars in the last seven days of the second quarter, achieving a much-discussed production goal by the thinnest of margins.

Musk wrote that, not only did Tesla "factory gate" more than 5,000 Model 3s, it may make 6,000 Model 3s a week next month.

Tesla said that for the first time, Model 3 production in a quarter (28,578) exceeded combined Model S and X production (24,761) with nearly three times as many Model 3s produced in the most recent quarter versus in the first quarter. "We'd like to thank Doug for his hard work over the years and for everything he has done for Tesla", said a Tesla representative in a statement to Roadshow. In recent weeks, company executives concluded they could produce Model 3 underbodies with fewer spot welds than they had been using.

Investors joined in the applause on Monday morning, with the shares rising roughly 4% in early trading.

"Now that Tesla has achieved the 5,000 mark [for the Model 3], it needs to do so on a steady, routine basis and with excellent quality", Michelle Krebs, an analyst with car-shopping website Autotrader, was quoted by The Los Angeles Times as saying.

News that Tesla had hit the 5,000-per-week target came out Sunday as the last Model 3 rolled off the assembly line and employees celebrated.

Tesla will have to prove to investors that it can sustain and increase its production pace, and some skeptics have bet against the company.

Despite the simpler design and feature set, Tesla has struggled to get production numbers to a sufficient level.

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Surprisingly, this is a promise Tesla has (almost) delivered on.

"In the interim, we do not see this production rate as operationally or financially sustainable", said CFRA analyst Efraim Levy. "Many have been waiting since March of 2016, when Tesla began taking orders with a $1,000 refundable deposit".

The Tesla Model 3 quickly became one of the most anticipated cars in automotive history.

Scaling up production of Model 3s has created a host of issues for the company, as it missed several manufacturing goals in past months and pushed critics to question its future viability.

Now the cheapest Model 3 that can be ordered costs around US$49,000, and they can run upward of U.S. $70,000.

Tesla has been burning through cash to produce the Model 3.

Tesla's total second-quarter production was 53,339 cars.

TipRanks indicates Wall Street is evenly split between a battle of bulls vs. bears on this electro vehicle giant giant.

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