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Tesla Production Hits All-Time High—But Still Misses Model 3 Targets

Tesla has hit an all-time high for production last quarter. But it’s not all good news.

The electric car maker on Tuesday announced that it produced 34,394 vehicles during the first quarter, a 40% increase over the fourth quarter and its best quarter ever. The majority of those cars—about 25,000—were Model S and Model X. The balance was made up of the Tesla Model 3.

The figures might also be a disappointment for Tesla, which has been promising much faster production for its more affordable Model 3. The company had previously said that it would reach a production target of 2,500 Model 3 units per week by the end of the first quarter. It had also previously promised a 5,000-a-week target by the end of the second quarter.

In its statement on Tuesday, however, Tesla said that it produced just over 2,000 Model 3 vehicles at the end of the first quarter. The company plans to produce another 2,000 Model 3 sedans within the next week.

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Despite that shortfall, Tesla remains bullish on its ability to produce Model 3s. The company pointed to “progress” in capacity and said that its “Model 3 production rate will climb rapidly throughout Q2.” It expects to hit a weekly production rate of 5,000 Model 3 units within three months.

Tesla released its data against a troubling backdrop of bad news.

Just last week, Tesla announced that it was recalling 123,000 Model S sedans over problems with a power steering component on cars built before April 2016. Also last week, the company released information about a fatal Model X crash in March. The company said that its autopilot semi-autonomous driving system was engaged at the time of the crash and the driver failed to react to a possible collision. Tesla argued that the unnamed male driver’s crash was made worse by a crash guard along the highway.

The combination of bad news, coupled with production delays, was enough to send Tesla shares tumbling last week and founder and CEO Elon Musk scrambling to address his company’s woes. He tweeted this week that he’s resorted to “sleeping at the factory” where Model 3s are produced to address production problems.

Despite the apparent troubles and missed targets, shareholders seemed pleased with Tesla’s announcement on Tuesday. Tesla (TSLA) shares shot up to nearly $270 after news of its production numbers. Tesla’s share jump might have also been bolstered by the company announcing it won’t need to raise equity or take on more debt this year to fund its operation.