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Tesla beat sales expectations for the fourth quarter of 2016, according to an update given by the company on Wednesday, prompting shares to rise more than 2 percent in after-hours trading.

The company also said the Model 3 sedan is "on track" to begin production in July, and reach volume production in September.

During a conference call, Tesla Chairman and CEO Elon Musk said the there is a long line of reservation holders for the car, but would not offer a specific number, because "people read too much into it."

Related: Tesla’s ‘Autopilot’ Begins Braking for Wreck Before Driver

Musk also announced a high-profile departure, with Chief Financial Officer Jason Wheeler leaving the company at the end of April.

Wheeler will be replaced by Deepak Ahuja, who left the CFO position in 2015.

Here's how Tesla stacked up against Wall Street estimates:

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Loss per share: 69 cents a share vs. a loss of 42 cents per share, expected by a Thomson Reuters consensus forecast.

Revenue: $2.28 billion vs. $2.19 billion expected by Thomson Reuters.

In a letter to shareholders, the company said it received a record number of orders for its Model S sedan and Model X sport utility, and it expects to deliver 47,000 -50,000 Model S and Model X vehicles in the first half of the year.

Cash increased by $300 million, from $3.1 billion at the end of the third quarter, to $3.4 billion in the fourth quarter.

The company plans to produce 5,000 Model 3 vehicles per week before the end of the fourth quarter of this year, and reach 10,000 per week "at some point in 2018," Tesla said in its shareholder letter.

Later this year, Tesla will also finalize locations for its third, fourth, and possibly a fifth Gigafactories — the company has one Gigafactory in Nevada, where it makes batteries and will make Model 3 component, and a second factory in New York where it makes solar power products.

The solar business, resulting from the acquisition of SolarCity, added $77 million of cash in the six weeks following the close of the deal.

The Model 3 rollout represents a big step for the company, as it will mark Tesla's transition — in the auto industry — from a small niche manufacturer of high end electric vehicles to a mass market manufacturer.

Tesla "is now reaching the point where it is going to have to jump off the pier and swim with the sharks," said Jack Nerad, executive editorial director and executive market analyst for Kelley Blue Book.

"I would think one thing a lot of people of might largely ignore is the leap it takes — and it is a big leap, across a gorge really — to go from being a specialty manufacturer of high end electrics to being a high volume seller," Nerad told CNBC on Tuesday. "You have a lot of spinning plates. Actually building the car is not the most difficult of tricks you have to pull off."

Tesla will have to manage selling cars and providing service at a local level, master its product cadence (the pace at which old models are replaced by new ones), and myriad other aspects of becoming a much bigger company than it currently is.

That could be a challenge given the company's track record of production shortfalls. Tesla said in early January that its production fell slightly short of its target 80,000 vehicle deliveries for 2016, at 76,230.

Tesla may also disclose more details on its plans for the recently acquired SolarCity business. In October, CEO Elon Musk said he expected the deal to have a "neutral" impact on the company's fourth quarter.

Tesla shares were approaching an all-time high early last week, but have since retreated. Even so, the stock is still about 54 percent higher than it was a year ago.

Barclays analyst Brian Johnson said in a note sent Wednesday that the "recent run-up in Tesla stock has less to do, in our view, with anything around the near-term financials, and more to do with the nearly superhero status of Elon Musk."