Tesla, Elon Musk Meet Model 3 Production Goal: 'We Just Became A Real Car Company'

Tesla Inc TSLA shares popped more than 6 percent Monday morning as traders took in a Sunday memo CEO Elon Musk sent to staff celebrating second-quarter production achievements.

“Not only did we factory gate over 5000 Model 3’s, but we also achieved the S & X production target for a combined 7000 vehicle week!” Musk wrote in the internal email.

A separate tweet touted a seven-day production rate of 7,000 vehicles.

7000 cars, 7 days
♥️ Tesla Team ♥️

— Elon Musk (@elonmusk) July 1, 2018

Notably, Reuters reported shortly after the email’s release that Tesla actually achieved its 5,000-car goal — one pushed back quarter after quarter — around 5 a.m. on July 1, just shy of the targeted deadline.

Why It’s Important

Musk embraced Tesla’s near guidance beat as a point of validation. “I think we just became a real car company…” he told staff.

The Street may regard the numbers with greater skepticism, though. Goldman Sachs and peers have suggested the 5,000-per-week rate may not be sustainable or replicable in the near term, particularly given the extreme measures Tesla took to achieve them.

The CEO conceded the strain in his note.

“We either found a way or, by will and inventiveness, created entirely new solutions that were thought impossible,” Musk wrote. “Intense in tents. Transporting entire production lines across the world in massive cargo planes. Whatever. It worked.”

What’s Next

Musk said the company is on track to produce 6,000 Model 3s per week “next month.”

Tesla announced Monday morning Q2 production of 53,339, which is up 55 percent sequentially, and deliveries of 40,740. Its FY2018 target for 100,000 Model S and Model X deliveries is unchanged. The company reaffirmed guidance for positive GAAP net income and cash flow for Q3 and Q4.

At time of publication, Tesla shares were set to open around $364.50.

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