Tesla reported a record year-over-year jump in the number of vehicles delivered in the first quarter of this year. On Sunday, the electric car maker reported a surge of 69% from a year ago to a quarterly record of 25,000 vehicles, proving that delays in production are a thing of the past.

Tesla Inc. TSLA Model 3
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Record deliveries and production

Tesla outperformed analyst expectations of delivering 23,000 to 24,000 vehicles. The EV firm said that about 13,450 Model S sedans and 11,550 Model X crossovers were delivered during the quarter. Now, the Palo Alto-based company expects to deliver between 47,000 and 50,000 Model S and Model X vehicles in the first half of 2017.

Tesla also stated that 4,650 vehicles were in transit to customers and will be added to the second-quarter number. Further, the EV maker stated that the final number could vary by up to 0.5%. The company stated that these numbers should be considered the preliminary figures and could change when the company reports its first-quarter numbers next month.

Although the production of 25,418 (also a record) cars was much higher than the 15,150 cars produced last year, the increase was much smaller when compared to the fourth quarter when the company built 24,882 cars, notes The New York Times.

According to CEO Elon Musk, the company is looking to ramp up annual production to 500,000, including the Model 3, in 2018. If the company moves at this rate, it will have to produce about 40,000 cars per month, which is more than what it produces as of now.

Model 3 is a big challenge for Tesla

Tesla is undoubtedly moving at a brisk space and is proving to be a threat for established automakers. However, the company is facing several challenges, including the Model 3, the Gigafactory and SolarCity. Tesla’s automobile segment also faces uncertainty, considering the Trump’s administration stance on the tax credit.

Starting in July, the company will begin production of the Model 3, which is being marketed as a compact car for the masses. The Model 3 will be priced around $35,000, and the company expects to produce the car in higher volumes than its other models.

Jessica Caldwell, a senior analyst with auto-information website Edmunds.com, said, “Sales have been good for Tesla in the last three months, but the Model 3 will be their biggest challenge yet as I imagine most of their company resources are focused on that vehicle.”

Tesla has been taking big risks since it went public in 2010. However, investors saw a threat for the first time in February when Musk stated that the company could get “close to the edge” as it is burning cash ahead of the Model 3 launch. However, last week, China’s Tencent Holdings acquired a 5% stake in Tesla amounting to $1.78 billion, creating significant cash flow for the company. The mass-market, midsize Model 3 sedan will be launched toward the end of this year in the U.S.

On Friday, Tesla shares closed up 0.14% at $278.30. Year to date, the stock is up more than 30%, while in the last year, it is up more than 17%. the stock has a 52-week high of $287.39 and a 52-week low of $178.19.