Tesla also will need to keep the pipeline of buyers full, and a piece by Business Insider postulates some disappointment will come with "a Toyota of Teslas" by those who imagine they're getting 80-percent of a Model S for 50 percent of the price. The Chinese market was only second to the U.S.in terms of revenue generation for Tesla previous year. If they continue to buy Tesla shares, then it has every possibility of beating General Motors' market cap of $51.11 billion since the difference is only around $2.5 billion.
Tesla said it delivered a record 25,418 vehicles in the quarter ended March, a 69-percent increase from a year ago and edging past Goldman Sachs' forecast of 23,500 vehicles.
The stock surge followed Tesla's announcement that it produced 25,418 electric cars in this year's first quarter - putting it on a plateau of sorts, since Tesla made about the same number of cars in the last two quarters of 2016.
Stock movements after the monthly sales reshuffled the hierarchy among United States companies, with Tesla Motors overtaking Ford for the number two spot and closing the gap with GM, the biggest USA automaker by market capitalization. Tesla's surging shares have boosted its market value to US$47.8 billion, about US$2.7 billion more than Ford. On the other hand, there is a risk of the company's market cap going below the Ford market cap of about $45.31 billion.
Musk tweeted, "Stormy weather in Shortville..."
For the industry as a whole, it may indeed be stormy weather.
As Tesla tries to crack the mass market, the company will start to look more like a conventional carmaker and will have a tougher time justifying its value, said Maryann Keller, an auto industry consultant in Stamford, Connecticut.
GM saw sales gain 1.6 percent, helped by Americans' strong demand for light trucks and sport utility vehicles, as well as bigger discounts. Ford's shares sank 3% following a weak sales report for March. The company reportedly has about 400,000 advance reservations for the new vehicle, and Musk has forecast total Tesla sales will hit 500,000 in 2018, climbing to around 1 million by 2020.
Record Honda truck and SUV sales could not help the Japanese auto maker notch an overall increase last month, as sales slipped 0.7 percent, when accounting for declines at its Acura luxury brand.
"Inventories have reached levels not seen in more than a decade, and incentives are rising", Caldwell said, referring to discounts and other enticements offered to consumers. This was also a new quarterly record for us.
But while Toyota echoed that cautionary tone, pointing to a declining selling rate, GM remained optimistic.
US consumer preferences have been gravitating toward SUVs and luxury SUVs for years, so Tesla improving its Model X production capabilities should help it better meet that demand.