$8 billion of sales in 24 hours – that’s not a bad day for Elon Musk. That’s the expected value of the more than 200,000 in presale orders Tesla generated after unveiling its new Model 3 mass market electric car last week.

Many were expecting an Apple-style blockbuster event, judging from the flurry of social media images from Tesla die-hards who camped out overnight to put down their $1,000 on the $35,000 base model sedan. That was before many had even seen the new auto.

With a minimum range of 215 miles and a zero to 60 acceleration in less than six seconds, that excitement isn’t expected to slow anytime soon. In fact, by the end of the first weekend, pre-orders topped 275,000. For reference, this is on par with the total number of Honda Civics sold in all of 2015.

A watershed moment

Despite missing projections on its Q1 car shipments (with its 14,820 vehicles dipping below its 16,000 guidance), this event marks a watershed moment for Tesla.

From the beginning, Tesla’s ambition was to become a leader in mass market, sustainable transportation. The earlier, high-end models were simply a means to that end. Now, that ambition has been achieved with the record-setting Model 3.

What does this mean for Tesla’s business model? This unexpected level of demand dramatically shifts forward the production curve for the Model 3. Tesla’s previous projections set a goal of 200,000 cars sold by sometime in the middle of 2019.

The Model 3 upended that timeline when it helped Tesla sell out the next three years of expected production in just 24 hours.

A new timetable

I believe Tesla now has every incentive to ramp up production to full scale as quickly as possible. So does Musk, as he tweeted several times after the reveal that the production timeline has to be examined.

To see what it will take for Tesla to achieve this, let’s examine the facts.

It took Tesla approximately two and a half years to ramp up Model S production to its maximum demand level of 50,000 per year. I believe Tesla can replicate this timetable, hitting its 350,000 per year production in less than three years – by the end of 2018 rather than 2020.

Since there’s no longer any question about demand for the Model 3, this should provide the catalyst and the capital to ramp up production beyond the previous estimates. Hitting this target two years ahead of schedule doesn’t just dramatically bring forward Musk’s goal of mass market electric transportation, it also completely changes the present value of Tesla shares.

The market seems to agree. After the blockbuster Model 3 launch, Tesla shares broke out through their 200-day moving average and are now trending towards new all-time highs.

Tesla trending chart

Will Tesla go to $500?

Despite Tesla’s incredible rise from concept car to mass market appeal, it faced naysayers every step of the way. In 2013, before the launch of the Model S, Tesla was one of the most heavily shorted stocks on Wall Street. When the Model S surpassed all reasonable expectations, Tesla short sellers were squeezed as the shares surged from $50 to $200 in a matter of months.

History appears to be repeating with the Model 3 launch. In recent months, the shorts have piled into Tesla once again – sending the short interest above 30%.

Last week, Tesla’s Model 3 launch surpassed expectations, to an even greater degree than with the Model S. All of the same ingredients have come together for another significant short squeeze, leaving us to wonder: could Tesla shares rise to $500?

By Cole Wilcox and Ross Hendricks

Cole Wilcox is the Chief Executive Officer and Ross Hendricks is a Senior Portfolio Consultant at Longboard Asset Management.

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