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Tesla stock revs up after it delivers 83,500 electric cars in third quarter

However, Reuters reported that Tesla produced over 5,300 Model 3 cars in the last week of September, falling short of its target of 6,000
A red Tesla electric vehicle
Tesla continues to target 100,000 Model S and X deliveries in 2018

Tesla Inc (NASDAQ:TSLA) stock was on the rise Tuesday after the electric-car maker said it delivered 83,500 vehicles during the third quarter, beating Wall Street analysts' expectations and about 80% higher than all of its deliveries for 2017.

Indeed, Tesla breezed past its target of building at least 50,000 Model 3 cars in the third quarter, marking a level of production that is unparalleled for the car maker. The electric-car company delivered 55,840 of its Model 3 sedans, it said.

However, Tesla produced over 5,300 Model 3 cars in the last week of September, falling short of its target of 6,000, reported Reuters.

READ: Tesla Inc manufactures a record 80,000 vehicles in 3Q, says Elektrek report

The Model 3 sedan is key to loss-making Tesla’s profit plans and is part of its strategy of eventually becoming a mass-market car maker.

Over the weekend, Elon Musk reached a settlement over fraud charges with the Securities and Exchange Commission that requires him to relinquish his position as Tesla’s chairman and pay a $20 million fine. The company will also pay $20 million to US regulators.

Analysts at Baird, meanwhile, said the third-quarter delivery numbers were supportive of strong thrird quarter financial results. They reiterate their Outperform rating and $411 proce target on Tesla stock. 

"We think deliveries are good enough to support strong financial results for Q3; Model 3 production continues to ramp and deliveries exceeded consensus estimates. Additionally, TSLA indicated it plans to accelerate construction of its Shanghai factory to better compete in the Chinese market, though we continue to believe the company will not tap capital markets in 2018," wrote Baird analysts Ben Kallo and David Katter. 

"We expect shares to move higher into Q3 results, particularly as street estimates are raised to reflect solid deliveries," they added.

READ: Elon Musk's swift settlement with SEC a positive for Tesla but legal risks linger, analysts say

The analysts also said that Tesla's gigafactory enables the company to "drive down costs" through an industrialization of battery pack assembly and economies of scale.

"We think Panasonic's partnership could increase production efficiency and lower costs," wrote the analysts.

Tesla stock which was up nearly 2% to $316.79 in trading before the bell was up 0.38% Tuesday. 

Contact Uttara Choudhury at [email protected]

Follow her on Twitter@UttaraProactive 

-- (Updates with Baird analyst take, new share price) --  

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