Tesla shaved down losses and surpassed revenue estimates in Q4, and told investors Model 3 production will start in July.

On a conference call yesterday, CEO Elon Musk told analysts that the company is “on track” to start limited production then, with a goal of 5,000 Model 3s produced per week in the fourth quarter and 10,000 a week next year.

The pressure is on for Tesla to keep its word on scaling up to high-volume production as focus changes from the Model S and Model X luxury vehicles to the Model 3 with a promised $35,000 starting price.

Earnings and revenue came ahead of analysts’ projections and Tesla has yet to go from red to black, but the loss margin narrowed.

Tesla reported losing $121.3 million on an unadjusted basis, compared to a loss of $320.4 million last year. On an adjusted basis, the automaker lost $106.5 million for the quarter, versus $264.8 million during that period last year.

Quarterly revenue of $2.18 billion was slightly more than what analysts estimated.

Tesla’s quarterly report impressed investors enough to drive stock up 1.5 percent to $266.67 in after hours trading. That softened the day after, with Tesla shares trading around $260 through the morning.

Musk answered concerns that President Donald Trump’s administration may eliminate federal purchase incentives or subsidies for electric cars.

“It would be fine to get rid of incentives and subsidies, but that should be uniformly applied to all industries,” Musk said.

Tesla will be able to weather the demise of incentives and subsidies much better than other automakers, he said.

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Investors have been concerned Tesla will be tapped in its cash flow and profits getting ready to mass produce the Model 3; and with all the costs related to the SolarCity merger, Tesla Energy, autonomous vehicles, and opening more Gigafactories.

The company said it will be investing $2 billion to $2.5 billion to ramp up its factory for Model 3 production.

The company does expect Model S and Model X sales to do well this year. Projected delivery of 47,000 to 50,000 of these vehicles combined through June would mean sales will jump about 61 percent over the first half of last year.

The company also mentioned during the conference call that chief financial officer Jason Wheeler is leaving. He’ll be replaced by former Tesla CFO Deepak Ahura.

USA Today