Tesla stock (TSLA) was on pace for its best day in more than a decade on Thursday after the electric vehicle maker beat earnings estimates and promised that production of a lower-cost model would begin early next year.

Tesla shares rose more than 20% on Thursday afternoon, which would mark the stock's biggest one-day gain since May 2013, when the company first reported quarterly revenue of $500 million. Last quarter, vehicle sales exceeded $20 billion.

The sharp rise in Tesla shares boosted the S&P 500's Automotive Sub-Industry Index, which was up more than 18% as of Thursday afternoon. Shares of other automakers were mixed, with General Motors (GM) slipping and Ford (F) gaining.

Uber (UBER) shares fell more than 2%; The company's stock rose to a record high earlier this month as Tesla's robotaxi launch failed to convince investors that it posed a threat to the ride-hailing giant.

Why Tesla shares are rising sharply today

The company reported Wednesday evening that automotive profit margins improved for the first time since the beginning of 2022. The profitability of the company's core automobile business has been under pressure for years due to a price war in China and sluggish U.S. demand.

CEO Elon Musk assured analysts on the company's earnings call that “plans for new vehicles, including more affordable models, remain on track to begin production in the first half of 2025.”

Musk has long said a lower-cost model was on the way, but his enthusiasm for robotaxis and AI this year has raised doubts on Wall Street about his commitment to that plan.

Musk outlined other ambitious goals for Tesla on the call, including creating “by far the most valuable company” in the world and achieving “vehicle growth” of 20% to 30% next year. Tesla's total car sales are down 2% so far this year compared to 2023.