Tesla Inc. reported a wider second-quarter net loss of $336 million even as revenue more than doubled.
The company on Wednesday said it generated $2.8 billion in second-quarter revenue following a 53 percent jump in deliveries of the Model S and Model X during the period.
Tesla said it delivered 22,026 Model S and Model X vehicles in the second quarter, and 47,077 in the first half of the year. It also said it has $3 billion in cash on hand.
The company posted a loss of $293 million on revenue of $1.27 billion in the second quarter of 2016.
The latest second-quarter losses were lower than expected given the company's plans to rapidly ramp up vehicle output during the next two years. Tesla is expecting increased deliveries in the second half of 2017, following the sales debut of the Model 3 on July 28.
Tesla's automotive gross margin, which excludes the sale of zero-emission vehicle credits, rose to 25 percent during the latest period from 23.6 percent a year earlier.
The company said it expects positive gross margins on the Model 3 starting in the fourth quarter. Since the launch of Model 3 sales, Tesla said it has averaged 1,800 new reservations a day for the car. Model 3 deliveries to non-employees will begin in the fourth quarter, Tesla said.
The company sought to alleviate concerns that interest in the new car could sap demand for the pricier vehicles in the lineup, saying it expects to deliver more Model S and Model X vehicles in the second half than the number of vehicles delivered in the first half.
“Although too early to draw strong conclusions, we are seeing an even further increase in net Model S orders since the July 28th event,” the company said in a letter to shareholders Wednesday. “This growing demand gives us even more reason to expect increased deliveries of Model S and Model X in the second half of this year.”
Tesla burned through less cash in the second quarter than analysts expected before bringing out the Model 3 -- its most affordable model yet. Costly investments have strained the balance sheet of the electric-vehicle maker.
The company reported negative free cash flow of $1.16 billion in the second quarter in the letter to shareholders, less than the $1.3 billion projected by analysts. The burn rate was still a quarterly record and almost double the amount of money Tesla went through in the first three months of the year.
The Palo Alto, Calif., company has had little trouble drawing investor interest in funding Musk’s ambitions, with optimism about the Model 3’s prospects contributing to a 53 percent jump in its stock price this year.
The company's shares rose 4.9 percent to $341.98 as of 4:53 p.m. ET Wednesday, after the close of regular trading.
Tesla spent heavily leading up to last week’s roll out of the Model 3, a sedan that starts at $35,000. Tesla has been making costly investments to ramp up car and battery manufacturing, expand customer service operations and build out its network of recharging stations to execute CEO Elon Musk's mission to transition the world to electric vehicles and sustainable energy.
Tesla forecast spending $2 billion in capital expenditures in the second half of the year, up from $1.5 billion in the first six months of the year.
Katie Burke, Bloomberg and Reuters contributed to this report.
