Tesla missed its quarterly target for producing its hot Model 3 cars, but investors still breathed a sigh of relief Tuesday that the numbers weren't more disappointing. During the last week of the quarter, the electric-car maker produced 2,020 Model 3s, coming up short of its goal to produce 2,500 Model 3 sedans a week.
But that number is better than some signs had warned. For example, Bloomberg's Model 3 production tracker had previously estimated the weekly number to be far lower, at just below 1,200. A CNBC report about Tesla facing potential delays from faulty parts coming off the line also sent jitters through the market. Tesla denied the issue.
In its long-awaited report, Tesla also said it will not need an equity or debt raise this year, apart from standard credit lines, contrary to what many investors have been expecting.
After rising 7 percent before the bell Tuesday, shares eased up and were up 3 percent at around $260 in midmorning trading.
Shares of the electric-car maker are still down almost 18 percent since the beginning of the year, partly on concerns over the company's ability to ramp up production of the Model 3, Tesla's first attempt at a mid-priced car. Anticipation over the Model 3 had helped drive the stock to an all-time high of $389.61 in September 2017.
Tesla produced nearly 35,000 vehicles in its first production quarter of 2018 — a fourfold increase over the previous quarter, the company said. Of the 34,494 vehicles built in the quarter, 9,766 were Model 3s.
The company expects output to climb rapidly and continues to target a production rate of 5,000 vehicles a week by the end of the second quarter.
First-quarter deliveries also set a record, totaling 29,980 vehicles. Of the three Tesla models, 11,730 were the Model S, 10,070 were the Model X and 8,180 were the Model 3.
The stock skyrocketed throughout much of last year, mostly because of anticipation over the Model 3. Tesla aimed to hit a production target of 2,500 Model 3 sedans a week by the end of the first quarter and 5,000 a week by the end of the second quarter. The company had initially planned to reach these goals in 2017. But production issues have plagued the company, and it has repeatedly had to delay its output targets.
On Monday, Tesla confirmed a report from The Information that said CEO Elon Musk has taken over Model 3 production from the company's senior vice president of engineering, Doug Field.
It also announced a voluntary recall of 123,000 Model S sedans on Thursday, and made the National Traffic Safety Board "unhappy" when it publicly shared data from a fatal crash in California involving its driver assistance system, Autopilot.