Musk said the company has learned a great deal from the mistakes made with Model S and X production. Tesla said it plans $2 billion in capital expenses in the second half of the year, which would erode its cash cushion to about $1 billion.
Tesla accelerated beyond second-quarter expectations on Wednesday and rode investor interest in its new "affordable" Model 3 to a 7.4-percent jump in after-hours trading.
In the second quarter, Tesla increased spending on research and development by 92% to $US369.8 million. Musk said Tesla may experience some fluctuations in production rates, but "people should have zero concerns".
Tesla CEO Elon Musk remained buoyant, despite the increase in losses, saying: "July was one of our best months ever". Tesla's most anticipated Model 3 has greatly influenced the results and the waiting list for the cheaper alternative electric auto grows longer and longer. Over the past eight months the company has nearly doubled its share price from its December 2016 low of $181. Tesla's stock rose to $348 per share, despite the record loss.
But Musk shrugged off the cancellations, noting that the company has been averaging about 1,800 new Model 3 reservations per day since the first 30 cars were handed over Tesla employees on Friday. Baillie Gifford & Co. now owns 13,625,678 shares of the electric vehicle producer's stock valued at $3,792,025,000 after buying an additional 336,130 shares during the period.
Some analysts believed demand for the company's Model S and X had plateaued, and Musk has been quick to pitch the Model S as Tesla's superior, most technologically advanced auto. However, now that Tesla has begun deliveries of their new Model 3 line, some are concerned the company won't be able to meet the overwhelming demand for the electric vehicle (EV).
"I think this is inconsequential because with a small amount of effort we could easily drive the Model 3 reservation number to something much higher, but there's no point", Musk told investors.
The Model Y is expected to share a lot of components with the Model 3. It delivered just over 22,000 Model S and Model X vehicles for the quarter. Tesla CEO Elon Musk says the company was on track in many areas, including batteries, solar panels, and maintaining sales of its existing vehicles.