Tesla's Model 3 registrations beats the BMW 3-Series and Mercedes C-Class in California

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Tesla's Model 3 sedan recorded more registrations in California than its class rivals BMW 3-Series and Mercedes C-Class in the first quarter, according to a report by the California New Car Dealers Association (CNCDA).

Model 3 registrations totaled 3,723, or 14.3 percent of the near-luxury segment, compared with 3,323 for the Mercedes variant and 3,260 for the BMW model, a CNCDA report said.

California is seen as a key market for global luxury vehicle brands not just because of its size, but because other markets often follow trends set by wealthy consumers in the state. 

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Tesla-CEO Elon Musk speaks during the delivery of the first Tesla Model 3. It recorded more registrations in California than its class rivals BMW 3-Series and Mercedes C-Class in the first quarter, according to a report by the California New Car Dealers Association (CNCDA)

Tesla predicts that Model 3 is 'already on the cusp of becoming the best-selling mid-sized premium sedan in the US'.

Model 3 deliveries in California have also made Tesla the fastest growing automaker in the state based on registrations. 

Tesla started delivering the Model 3 to customers in December 2017, but has struggled with what Elon Musk calls a 'production nightmare'.

Earlier this week it emerged Tesla's most affordable Model 3 sedans won't be arriving for a little while longer.

Billionaire tech mogul and Tesla chief Elon Musk released new details about the long-awaited vehicle in a series of tweets late Sunday.

Chief among them, Musk said the electric car company needs three to six months after achieving its goal of producing 5,000 Model 3s per week, or else Tesla could 'lose money and die'.   

'With production, first you need [to] achieve target rate and then smooth out flow to achieve target cost,' Musk said in a tweet. 

'Shipping minimum cost Model 3 right away would cause Tesla to lose money & die'

'Need three to six months after 5,000 per week to ship $35,000 Tesla and live'.

Musk first unveiled the $35,000 Model 3, billed as Tesla's first mass-market car, at an event last July. 

Billionaire tech mogul and Tesla chief Elon Musk released new details about the long-awaited, $35,000 Model 3 sedan (pictured) in a series of tweets late Sunday

Since then, the firm has been plagued with production delays and manufacturing bottlenecks as it has worked to get the Model 3 in the hands of customers, but has made progress in recent months. 

Tesla said in April that it delivered 8,180 Model 3 vehicles in the first quarter, after announcing that the affordable sedan had been named the top-selling electric vehicle in the US. 

Tesla chief Elon Musk (pictured) said the company needs three to six months after achieving its goal of shipping 5,000 Model 3s per month or else the firm could 'lose money and die'

As Tesla continues to ramp up production of the Model 3, it has given greater attention to delivering higher-end versions of the sedan.

Tesla has been more focused on fulfilling orders for Model 3 sedans with longer-range battery packs and quicker charging capabilities, which are priced at about $44,000, according to Bloomberg. 

On Sunday, Musk teased new details about the previously announced all-wheel drive Model 3. 

He said the dual-motor, all-wheel drive performance version will be able to accelerate from zero to 60mph in just 3.5 seconds, has a 310 mile range and a top speed of 155mph. 

And it'll cost about $78,000 -- a significant upgrade from the base model.

Musk said the performance Model 3, which is available with black and white interiors, will cost 'about the same' as the BMW M3 sedan, which is priced at $66,500. 

However, the souped version does not include Tesla's vaunted Autopilot feature. 

Musk provided more details about the Model 3 performance vehicle's dual motor, saying that users can 'full drive the car even if one [motor] breaks'. 

The announcement of the performance Model 3 pushed Tesla shares higher by 2.6% to $284.12 on Monday afternoon. 

Tesla has prioritized higher-end versions of its cars in the past, using the same strategy with its Model S sedan and Model X crossover SUV.  

Separately, research firm Berenberg raised its price target for Tesla shares to $500 from $470, saying the company's margin targets for the car were now reality and not just a hope.

Analysts say Tesla's future growth hinges on the success of the Model 3 (pictured), its most affordable vehicle to date which starts at a base price of $35,000

Analysts say Tesla's future growth hinges on the success of the Model 3, its most affordable vehicle to date at a base price of $35,000. 

The company has so far struggled to ramp up production and failed to reach a series of weekly production targets.

Musk, whose refusal to answer questions from some analysts in a call earlier this month prompted a fall in shares, said that Tesla had to focus on delivering higher-priced Model 3s first, or it would 'die'.

The company, which is undergoing a 'thorough reorganization' to contend with production problems, senior staff departures and recent crashes involving its electric cars, is striving to reach a production rate of 5,000 cars per week.

On Friday, proxy adviser Institutional Shareholder Services (ISS) backed a shareholder proposal to separate Musk's current chairman and CEO roles, suggesting that shareholders would be better served by having Musk focus on running the company.