This year upstart automaker Tesla faced its biggest test yet, introducing the Model 3, CEO Elon Musk’s long-promised electric car for the masses.

Fans and foes are still waiting for the results.

Model 3 production and deliveries have lagged far behind expectations. Musk handed over the first batch in late July at Tesla’s Fremont factory, and the company confidently predicted it would build 1,500 in the third quarter, revving up to 5,000 per week by year’s end.

Instead, the company made just 260 in the third quarter, averaging fewer than three per day. Those delivered went to Tesla employees who had ordered them, with the employees serving as testers to shake out any bugs in the cars.

Tesla confirmed last week that non-employee deliveries are finally beginning to take place. Fourth-quarter production and delivery numbers will likely be released next week.

For Tesla, the first new American car company in decades to survive infancy, 2017 was supposed to be a time of transition — from boutique automaker for the rich to a mass-market player. Musk’s goal is nothing less than shifting the world to sustainable transportation, and he has grand plans to crank up manufacturing for all three of the company’s models, to the point where Tesla can build half a million cars in 2018.

Even for established automakers, introducing a new model is not easy. And if the Model 3 is a test for Tesla, analysts say the company and Musk have yet to pass it.

“I want to see him start executing and delivering on those fantastic ideas of his,” said Rebecca Lindland, senior analyst for the Kelley Blue Book auto information service. She has a personal stake in Musk’s ability to deliver: She’s one of an estimated 400,000 people who put down $1,000 apiece to reserve a Model 3.

“I’m somewhere in the 300,000 range, so I’m not waiting in my driveway,” Lindland said. “Elon tends to overpromise. When he does deliver, it’s usually pretty good.”

The Palo Alto company gave true believers plenty to savor this year. Even as the company worked to ramp up Model 3 production, Musk unveiled the design of an electric semitruck and a revamped version of its original car, the Tesla Roadster. The Model 3 itself wowed early reviewers with its spare interior, whose dash has almost no controls other than a broad touch-screen.

The company also plugged the world’s largest lithium-ion battery pack into Australia’s electricity grid to guard against blackouts. Musk promised Tesla could complete the installation in 100 days or the pack would be free. The job took 60 days.

Tesla installed a smaller grid-tied battery pack in Southern California, and used a combination of solar panels and batteries to restore electricity service to a children’s hospital in Puerto Rico, after Hurricane Maria demolished the island’s power grid.

And yet, the Palo Alto company continues to bleed money.

Tesla has only recorded two quarterly profits in its seven-year history as a publicly traded company. For the first nine months of this year, Tesla lost $1.29 billion — compared to $553.6 million during the same period of 2016 — as the company labored to expand production. Bloomberg estimated last month that the company was burning through $8,000 per minute.

“The free cash burn has been very large this year,” said David Whiston, an equity analyst for the Morningstar research firm. “It’s more than a sense that it’s getting worse — the math is there, every quarter.”

But those continued losses have not weighed down the company’s stock. Neither has the Model 3’s slow rollout. Tesla shares soared nearly 50 percent this year, trading well above $300 per share most of the time.

“You’re buying this because of what you think the company is going to look like in 2030, not how many cars they ship next quarter,” said Whiston, who thinks the company should issue more equity now to deal with the cash burn. “Balance sheets are the kind of thing nobody talks about until it’s too late, so I’d rather see them take that risk off the table.”

Tesla’s solar unit, known as SolarCity until Tesla bought it in 2016, saw declining installations during the first three quarters of 2017, as the company stopped door-to-door sales and focused instead on selling solar systems through Tesla’s stores. While acknowledging the drop in installations, the company said in financial reports that the profit margins on its solar products were improving.

Musk, meanwhile, continues splitting his time among several companies, a practice that has led skeptics to wonder if his attention is sometimes stretched too thin. Besides Tesla, Musk runs rocket maker SpaceX, and in 2016, he founded the Boring Co. to improve urban traffic by tunneling under cities.

For 2018, the question for Musk and Tesla will be whether they can answer the challenge of mass-producing a high-quality car.

Production at the Fremont factory, which now employs nearly 10,000 people, has increased this year, just not as quickly as the company had hoped. In the first three quarters of 2017, Tesla delivered nearly as many cars — about 73,150 — as it did in all of 2016, when it delivered 75,890 vehicles.

The company, analysts say, must avoid the missteps of its last vehicle launch —the Model X SUV. Production and deliveries took months to ratchet up, and even when they did, early buyers complained of glitches, particularly with the car’s distinctive gull-wing doors.

“They’ve got to get on track and show their customers that they’re not going to be waiting for an unreasonably long period,” said Bruce Clark, a senior vice president at the Moody’s research service. “I would suspect that if they’re able to do that, and the vehicles are glitch-free, they’ll be able to maintain goodwill.”

David R. Baker is a San Francisco Chronicle staff writer. Email: dbaker@sfchronicle.com Twitter: @DavidBakerSF