Tesla Inc said on Wednesday it was optimistic it could make a first quarter profit and expected to generate a profit and positive free cash flow consistently beyond the first quarter as it ramps up production of its Model 3 sedan.

The electric car maker reported a smaller fourth-quarter profit compared with the previous three months and said Model 3 production volume in California should reach 7,000 units per week by the end of the year.

The company said it made a net profit of $139.5 million (£106.8 million) in the three months ended Dec. 31, compared with a $311.5 million profit in the third quarter, when it benefited from regulatory credits.

Shares of the company fell nearly 3 percent as Tesla missed analysts’ expectations for quarterly profit. Excluding items, Tesla earned $1.93 per share. Analysts had expected a profit of $2.20 per share, according to IBES data from Refinitiv.

Tesla also said its optimistic target was to achieve a very small GAAP net income in the first quarter.

The company said, barring unexpected challenges with Gigafactory Shanghai, it was targeting annualised Model 3 output of more than 500,000 units sometime between the fourth quarter of 2019 and the second quarter of 2020.

(This story corrects an earlier headline to say shares fell, not rose in headline)