Model 3 is on target, says Elon Musk

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Tesla Inc (TSLA.O) shares rose 3.5 percent on Wednesday morning after Chief Executive Elon Musk said the auto maker was now churning out 500 of its Model 3 sedans a day and should achieve its 5,000 per week target by the end of June.

"Despite a lot of difficulties, all parts of the Model 3 production system have demonstrated a 500 vehicle per day capability or a 3500 per week capability".

Some investors have been unnerved by the company's struggle to speed up production of its more affordable Model 3 auto, which is crucial to the company's long-term profitability.

The money-losing vehicle maker has said its forecasts for profit and cash generation in the second half of this year - which Musk reaffirmed during Tesla's annual meeting on Tuesday - are dependent on reaching this target. Another product gaining interest has been a high-performance and more expensive version of the Model 3. The stock was trading at $301.50 on Wednesday. "At a lot of other companies, they're built by marketing or the finance department and there's no soul".

Elon Musk has confidently kept total control of Tesla, as shareholders voted overwhelmingly to proposals keeping power at the company with the silicon valley billionaire.

But shareholders appeared Tuesday to affirm Musk's leadership by shooting down a proposal that could have stripped him of his role as chairman of the board.

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"So, we're not going to do motorcycles", Musk said. "As I said before, we do not expect to need to raise any incremental debt or equity".

Musk has also come under fire for his behaviour during an earnings conference call last month, in which he cut off analysts posing financial queries, rejecting them as "boring, bonehead questions". Musk confirmed the four-wheel drive version of the Model 3 is due in July, while a "shorter-range battery/lower-cost" Model 3 should arrive "around the end of this year".

Given the number of factors at play, we'll be very interested to see Tesla can continue to hold things together.

One of the reasons for Musk's assurance that Tesla is turning the corner on manufacturing is the addition of a third general assembly line that completes the process of putting together the Model 3. A new teaser image of the small SUV was released that shows the front quarter of the vehicle, which features a tall, blunt front end and high hood. "This puts Tesla roughly two years ahead of the competition when it comes to battery costs and technology", Korus said.

The report says that 8 percent of depositors had configured a Tesla for production in April, which deems the purchase nonrefundable.

He added that discussions with government officials in China have been "really great" and that more details about the Shanghai plant would be shared "soon".