Tesla will shut down its Fremont factory for a week this month to prepare the assembly line for its highly anticipated midmarket electric car, the Model 3.

“This will allow Tesla to begin Model 3 production later this year as planned,” the Palo Alto company said Thursday. It will move toward a production of 500,000 vehicles annually in 2018.

Many say that the success or failure of the Model 3 will mark a key event in automotive history.

Electric cars have been around since the invention of the automobile, but they’ve yet to catch on with the buying public. Of more than 17 million cars sold in the U.S. last year, fewer than 1 percent were pure electric. Tesla is trying to change that.

Tesla said last year that it has taken 373,000 orders for the Model 3, with customers putting down deposits of $1,000 each. That number may have changed as more people placed orders and some dropped out.

Tesla plans to market the Model 3 for a starting price of $35,000 before any government incentives.

Michelle Krebs, senior analyst at Autotrader, said the car is critical to Tesla’s financial success.

The company has yet to score an annual profit, but given its ambitions and capital requirements, that’s not surprising.

CEO Elon Musk has conjured a grand vision for Tesla: a car company, a battery company and a solar energy company all wrapped in one.

But if the Model 3 fails to meet expectations, it could quash Musk’s dream. Tesla will need the cash flow generated by high-volume sales to pay for billions in investments and to provide a return to investors.

Meeting production goals won’t be easy. In 2016, the company delivered 76,230 of its Model S and Model X luxury vehicles. It plans to turn out half a million cars annually next year, most of them Model 3s.

The company is also contending with worker complaints and unionization efforts from some employees.

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Investors have assembled themselves into opposing camps, with bulls pushing the share price to record highs while short positions — bets against the company — are tapping record highs too.

Tension is high as Musk attempts to smoothly combine a major acquisition, SolarCity, into Tesla’s automobile business and lithium-ion battery operations. The idea is to create a one-stop shop for solar rooftops with home battery storage units that can be used to juice electric cars.

Meanwhile, Musk is running SpaceX, which builds rockets and capsules and shoots them into space.

Tesla has enjoyed remarkable success, with the Model S and Model X receiving stellar reviews. Its Autopilot technology, much of which will be incorporated into the Model 3, is widely considered tops in the industry.

The weeklong halt at the Fremont factory won’t affect total car production, with working days added to compensate, a spokesman said.

The biggest challenge is execution: Can Tesla — which has been plagued by production delays in the past — get the car out, on time, before other automakers flood the market with their own electric cars?

Russ Mitchell is a Los Angeles Times writer.