(Reuters) - An initial flurry of orders has put Tesla Motors’ new Model 3 sedan off to a fast start, but the company may need to raise more cash if it hopes to deliver the new electric vehicle to customers on time, analysts said on Friday.

Tesla’s stock price bounced around $237 in afternoon trading after opening at nearly $248, the highest mark in six months. Up to Thursday’s close, Tesla stock had soared 60 percent since hitting a 12-month low in February.

Chief Executive Elon Musk’s ambitious plans include launching the Model 3, Tesla’s first mass-market car, in late 2017 and boosting the company’s annual production tenfold to 500,000 by 2020.

But there are concerns among some investors in Tesla, which has promised to turn profitable this year, even after the hoopla and exuberance surrounding the unveiling late on Thursday of a Model 3 prototype.

On Friday, Musk said the company had taken orders for 198,000 Model 3s in the first 24 hours. Analysts questioned how long it could take to deliver those cars after the slower-than-expected launch of the company’s Model X sport utility vehicle late last year.

Higher-than-expected demand could mean that some customers making early reservations may not take delivery until 2019 or 2020, analysts said.

Morgan Stanley analyst Adam Jonas, a longtime Tesla booster, predicted the Silicon Valley car maker’s sales will hit just under 250,000 in 2020, but maintained a bullish $333 price target on the stock.

Barclays analyst Brian Johnson, with a bearish $165 price target, believes the surge of Model 3 reservations - each accompanied by a refundable $1,000 deposit - could reach 300,000 by the end of June.

The higher-than-expected number of orders could “set the stage for an equity offering” after the company’s first-quarter results are posted, Johnson said.

Much of any additional cash raised this year will be needed for Tesla’s new U.S. factories, as well as for further product development, Johnson said.

While the Model 3 will have a starting price of $35,000, some analysts expect the first cars will sell for an average of $50,000-$60,000. Tesla prices its current models in several “tiers,” depending on content and optional features.

RBC analyst Joseph Spak, who has a $180 price target, said strong initial orders for the Model 3 could help Tesla achieve positive free cash flow - a persistent issue for the company as it has struggled to build production capacity at its Fremont plant in California and finish construction of a battery “gigafactory” near Reno, Nevada.

In February, the company said it expected to be cash-flow positive in March.

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Tesla still faces a challenge in ramping up production for the Model 3.

Spak said Tesla may not be able to fulfill many of the early orders before 2019: “Demand was never really our concern, it is more about execution and getting production up to meet demand.”

Tesla, established in 2003, had sold less than 110,000 vehicles in its history through December, Sanford C. Bernstein analysts noted.

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By the time the Model 3 goes into production, it could face stiff competition from several entrants.

One key competitor is General Motors Co’s Chevrolet Bolt EV, which is expected to launch later this year and also will be priced from around $35,000.

Another is BMW’s i3, which is slated soon for an extensive makeover, as well as a redesigned version of the Nissan Leaf that’s due late next year.

Underscoring investor wariness about Tesla’s prospects, financial service Markit says short interest in the company’s stock has been around 25 percent of shares outstanding since early in the year. Short interest is a measure of investors who expect shares to fall.