Controversial Tesla CEO Elon Musk has finally enjoyed a public relations victory to match his brazen and often caustic public persona.

Tesla (TSLA) stock was at one point up more than seven percent during yesterday’s holiday-shortened trading session as the company set new delivery and production records.

TSLA closed at $234.90 for a gain of 4.61%.

Tesla Is Setting Records & Wowing Investors

Tesla smashed production and delivery records in what Loup Ventures’ Gene Munster says marks a “turning point” for the carmaker.

The electric automaker soundly beat previous records and analysts’ estimates in Q2 2019, delivering 92,500 cars for the quarter ending June 30 and producing 87,048 units. Its previous deliveries record was 90,700 back in Q4 2018. Last quarter, the company disappointed the market, delivering only 63,000 vehicles.

Tesla's record-breaking production and delivery numbers "mark a turning point for the Tesla story," Loup Ventures' Gene Munster said. https://t.co/w69Vi9ftLD pic.twitter.com/oEf09ZERXY — CNBC (@CNBC) July 3, 2019

The company’s delivery and production results suggested expectations of a strong third quarter, with a backlog of orders already piling up. Unit deliveries are used by analysts as a proxy for sales. Its 92,500 deliveries outpaced forecasts of 91,000.

With fears of falling demand for Tesla vehicles and controversy surrounding the alleged hubris of CEO Elon Musk, many analysts had feared the carmaker would face difficulties in the short-term. Those fears were swept aside by the company’s recent announcement.

Wedbush analyst Dan Ives told CNBC:

“Challenges remain, but this is a step in the right direction. The numbers were above even the bull estimates and shows a clear rebound for the company. This is a feather in the cap for Tesla.”

The Road Ahead Remains Plagued With Uncertainty

Those challenges are likely to come from competition entering the market as legacy car manufacturers enter the electric vehicle market, especially at the premium end.

Already, Ford and Jaguar have invested billions developing electric car models. Volkswagen and Mercedes-Benz have already begun taking orders for long-range electric vehicles.

Tesla told investors in its announcement:

“In addition, we made significant progress streamlining our global logistics and delivery operations at higher volumes, enabling cost efficiencies and improvements to our working capital position.”

Its flagship Model 3 was easily the biggest seller, with deliveries for Q2 at 77,550, more than three thousand units above estimates. Ives warned that the company must prove its sustainability to investors, particularly in the face of encroaching competition and high production targets, which Ives labeled:

“… still an Everest task, especially with competition coming at them from all angles. The real question is going to be, is this sustainable?”

Even after its monthlong rally, Tesla’s stock is down by almost a third over the last year. The company is currently valued at just under $42 billion.

The question, to borrow a phrase from Wedbush’s Ives, is whether Tesla’s sudden turnaround is sustainable.