Tesla is preparing to release a critical third-quarter earnings report in November, which could hinge on delivery numbers for the Model 3 sedan.
The Model 3 was designed to broaden Tesla’s customer base beyond the luxury segment and has generated significant demand since Tesla began taking reservations for it in March 2016. The automaker initially struggled to hit its production targets for the vehicle due in part to excessive automation at its Fremont, California, factory. In May 2016, Musk said he estimated the company would make 100,000 to 200,000 Model 3s during the second half of 2017. Tesla made 2,685 Model 3 vehicles in 2017.
But at the end of June, Tesla hit a long-delayed goal of making 5,000 Model 3 vehicles in one week and, at the beginning of this month, the automaker reported that it exceeded Wall Street expectations by delivering 55,840 Model 3 vehicles during the third quarter.
So far, the vehicle has put a strain on Tesla’s finances, as the company has posted significant losses in the quarters since it was launched. But Musk has said the company will become profitable in the second half of this year. During Tesla’s first-quarter earnings call in May, Musk said the Model 3 would earn around a 20% profit margin by the end of this year and a 25% margin in 2019.