Shares of Tesla Motors Inc jumped as much as 9 per cent before the opening bell on Friday and were set to open at their highest in six months after the electric car maker said orders for its new Model 3 sedan had sped past 130,000 in the first 24 hours.
The Model 3, Tesla's first car aimed at the mass market, was unveiled by Tesla Chief Executive Elon Musk on Thursday.
A survey by brokerage Evercore ISI ahead of the unveiling showed that investors had expected about 55,000 orders during the first 72 hours and 117,000 by the end of the year.
The sleek four-door car, which will travel 215 (345 km) miles on a single charge, will go into production next year and be ready for deliveries in the United States in late 2017 at a starting price of $35,000.
Make or break for Tesla
Many analysts consider the Model 3 to be a make-or-break product for Tesla, whose stock price has soared 60 per cent since hitting a 12-month low in February.
The Model 3 unveiling “exceeded all expectations", Evercore ISI analyst George Galliers said in a client note.
“To us the vehicle is 'the game changer' and will likely play a critical role in Elon Musk's desire to expedite the auto industry's transition from internal combustion engine to electric.”
“Yet again, it seems that investors are expecting Tesla to tear up the rule book,” he said.
The Model 3 is crucial for Tesla to reach its goal of selling 500,000 cars per year by 2020.
Tesla, which was established in 2003, had sold less than 110,000 vehicles in its history through December, Sanford C. Bernstein analysts noted.
“In 24 hours, Tesla surfaced as many serious buyers as it has converted into customers in its existence,” Bernstein analyst Mark Newman said in a research note. “That is the opportunity the car maker is tapping into.”
Those ordering the car - many of whom had queued up in the hundreds outside Tesla stores - were required to put down a refundable deposit of $1,000.
Tesla's shares were trading $246 before the opening bell after closing at $229.77 on Thursday.
Analysts believe that most of the orders for the Model 3 were placed before its unveiling, and they expect orders to pick up at a steady pace over the coming months.
One driver will be price.
The Model 3 is more affordable than comparable cars from BMW AG and Mercedes, Galliers said, noting that BMW had sold 444,000 of its 3-Series cars and Mercedes about 470,000 C-Class vehicles last year.
The Model 3 will also compete with General Motors Co's Chevrolet Bolt EV, which is expected to launch later this year.