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UPDATE 2-Tesla surges as Wall Street bets on Model 3

(Rewrites, adds detail on results, Consumer Reports test)

SAN FRANCISCO, Aug 3 (Reuters) - Tesla Inc jumped 6 percent on Thursday as its quarterly report fueled bets that its new Model 3 sedan will propel the luxury electric carmaker into the mainstream.

Chief Executive Elon Musk is counting on the Model 3, Tesla's least pricey car to date, to make the company profitable and establish it as the leading electric carmaker ahead of BMW, General Motors and other long-established players.

Tesla's stock is up 63 percent in 2017, underscoring Wall Street's confidence in Musk.

The Palo Alto, California company late on Wednesday reported quarterly results that beat average analyst estimates, and it said it received more than 1,800 reservations per day for the Model 3 since its launch last week.

Tesla had $3 billion in cash on hand at the end of the June quarter, reassuring investors who were worried after Musk warned on Friday that the automaker would face six months of "manufacturing hell" in ramping up production of the Model 3.

Musk said investors should have "zero concern" that Tesla would fail to reach its production target of 10,000 vehicles each week by the end of 2018.

Skeptics believe Tesla's aggressive production targets are unrealistic and that the company's electric cars will be overtaken by larger automakers.

At least two brokerages raised their price targets following Tesla's report. RBC Capital Markets raised its target price by $31 to $345, pushing it well ahead of the median price target of $322, according to Thomson Reuters data.

"While we don't have meaningful reason to doubt that Tesla can eventually achieve its targets, doing so in a timely manner without some growing pains could prove challenging," RBC Capital Markets analyst Joseph Spak wrote in a research note.

The $35,000 base-price Model 3 is Tesla's least expensive car. It is designed and priced to compete with high-volume luxury sedans like the Audi A4, BMW 3-series or Mercedes C-Class. Those typically sell for between $40,000 and $50,000, or about half the price of Tesla's previously launched cars, the Model S or Model X.

Also on Thursday, Consumer Reports said GM's Chevrolet Bolt electric car, priced at $37,495, reached 250 miles (402 km) on a single charge, beating out Tesla's 2016 Model S 75D and 2016 Model X 90D.

"A new Tesla Model S or X 100D would probably beat the Bolt's range, but you'd have to pay $100,000 or more for one of those cars," Consumer Reports said.

(Reporting by Noel Randewich in San Francisco and Sweta Singh in Bengaluru; Editing by Nick Zieminski)