"We are simply awestruck by the demand surfacing for the Model 3," wrote Stifel auto analyst James Albertine. "We had no idea the reservation orders would be this strong."
Tesla shares were trading about 3 percent higher Friday afternoon. The trading volume in the stock more than doubled its 30-day average.
According to one Carnegie Mellon professor, the Model 3 may have sold more units in one day than the entire U.S. plug-in auto industry in 2015.
Tesla says the most basic version of the Model 3 will start at $35,000, though the first ones delivered are expected to sell for far higher prices, perhaps even as much as $55,000 or $60,000 due to customers adding more features like a bigger battery pack with greater range.
The automaker promises the base model will have a range of 215 miles fully charged.
Musk estimated the average car would sell for roughly $42,000, including optional features, for total sales of about $7.5 billion. However, that assumes all of the customers who made a deposit will complete the order.
Tesla said customers can cancel their reservations and receive a deposit refund any time before they confirm a purchase agreement. The agreement comes around the time production on an individual's vehicle is slated to start.
So how many of the 198,000 reservation holders will follow through and actually order a Model 3?
If this enthusiasm of those waiting in line to reserve a Model 3 is any indication, a high percentage of those putting down a deposit will follow through and actually order the new Tesla.