Tesla (TSLA) stock was up over 10% Thursday afternoon, as the electric vehicle maker reported a better quarter than feared, given production challenges in China, component shortages, and the resources it's using to gear up production at new factories in Austin and Berlin.

In Tesla’s shareholder letter, the company noted that its installed annual capacity, or theoretical max production, increased by nearly two-fold. Tesla's Fremont production capacity expanded to 650,000 vehicles from 600,000 last quarter, and Giga Shanghai’s capacity grew to 750,000 from 450,000. Meanwhile, production of vehicles ramped up in both Austin and Berlin, with Tesla now claiming each factory has an installed capacity for 250,000 vehicles.

Overall, Tesla says it could theoretically deliver nearly 2 million of its EVs per year — a massive figure for a company that delivered 936,000 vehicles in 2021. Still, one analyst thinks that goal may be overly ambitious.

“Tesla is still in an elongated demand cycle; it's not like there's a bunch of vehicles sitting on the lot. I think demand is strong,” says Jeffrey Osborne, Cowen senior research analyst. Still, he added, “I'm not sure it's running at a 2 million run rate they're talking about, especially with the portfolio being a bit stale in my view."

Osborne predicts Tesla will hit that production rate by the fourth quarter of 2023, citing production capacity in Germany and Texas as one concern. Still, on Tesla's earnings call on Wednesday, Tesla Powertrain and Energy Engineering head Andrew Bagliano expressed optimism regarding the Austin and Berlin ramp-ups.

“We’ve grown cell production significantly on a 12-month rolling basis and have long-term contracts with all our partners for key battery metals, so we don’t see any major problems for the components, of course, barring unforeseen COVID-related shutdowns,” he said.

Tesla’s delivery forecast for 2022

While that does sound like good news for the future, the even bigger news for investors was Tesla reiterating its 50% CAGR (compound annual growth rate) target for deliveries in 2022. This would mean the company is aiming to deliver around 1.4-1.5 million vehicles in 2022.

Given that Tesla delivered 310,000 vehicles in the first quarter and 250,000 in the second, the company would need to deliver a relatively ambitious 900,000 vehicles in the second half of 2022 — almost doubling its output from last quarter for both Q3 and Q4.

Cowen’s Osborne is a bit pessimistic on these targets, though.

“They're loosey-goosey with targets, typically defined over multiple years, but that was a bit of a surprise — I thought they would use China as a scapegoat and lower the guide,” Osborne noted.