(Reuters) -- Electric car maker Tesla Motors Inc. posted a sharply wider net loss compared to a year earlier, reflecting higher engineering costs, but said development of its new Model S sedan was on schedule.
The automaker said its net loss widened to $34.9 million in the third quarter compared to a loss of $4.6 million a year earlier.
Revenue fell 31.4 percent to $31.2 million, Tesla said Tuesday.
Tesla expects to report losses until at least 2012 when the Model S is launched.
Research and development spending shot up in the third quarter to $26.7 million from $15.4 million in the second quarter. Tesla spent just $1.3 million on R&D in the third quarter last year.
The higher costs stem from Tesla's race to complete development work on the Model S sedan in time for its planned 2012 launch date.
It expects to complete a working prototype of the sedan, which it plans to sell for about $57,400, by year's end.
“The near term quarterly profitability is not a particularly meaningful goal because we're spending on the order of half a billion dollars over the next nine quarters," Tesla CEO Elon Musk said in a conference call. "So you can expect to see some fairly significant expenses there. It's really the only way to execute the business given that we're going from roughly 600 units a year to roughly 20,000 units a year.”
Tesla, which completed an initial public offering in the summer, has agreed to act as a key supplier to Toyota Motor Corp for an electric Toyota RAV4.
Toyota holds a $50 million stake in Tesla and Panasonic Corp has agreed to invest $30 million.
Ryan Beene contributed to this report