Why Tesla Shares Are Rising Even As Its Losses Widen

They cheered, however, the pace of reservations for the Model 3, around 1,800 a day, according to Musk, which would mean that volume for the $35,000 sedan for the next quarter could dwarf volumes for General Motors Co.

In its earnings letter for 2017 Q2, the company revealed how the process will work, TechCrunch reported. The company has never made more than 100,000 cars in a year, and its previous two models faced significant delays and production problems. "In fact, this has turned out to be the opposite situation - Model S and X increased".

"Early Model 3 launch milestones look strong, but the $2bn of 2H capex will make your eyes water", said Morgan Stanley analyst Adam Jonas.

Chief executive Elon Musk is counting on the Model 3, Tesla's least pricey auto to date, to make the company profitable and establish it as the leading electric car-maker ahead of BMW, General Motors and other long-established players.

In its report, Tesla said it generated $2.79 billion in revenue during the quarter, doubling the $1.27 billion figure from the same period a year ago, most of it from Tesla's automotive division.

Revenues are estimated to double to $2.55 billion. Bernstein analysts said in a report about the results of their July survey of Tesla Inc (TSLA) buyers that it sounds like many of them will be cancelling their orders.

"CEO Elon Musk sounds increasingly squeamish about the production ramp", Sacconaghi said in his note. "We're also very confident about costs". From the Roadster to Model X and Model S they changed a lot of concepts in our minds about cars.

The firm was also buoyed by Tesla's forecast that Model S and X sales in the second half of the year would be higher than the first six months of 2017.

Musk says he wasn't too fussed by the numbers, saying there was more than enough to deliver in the meantime, and compared it to a hamburger stall - if you have one and a half hour wait for a burger, you don't want to be taking more orders, he said. We were even able to get an exclusive extended test drive of the most affordable Tesla yet.

Elon Musk has thanked his management team for pulling him "back from the cliff of insanity", and encouraging him to design the upcoming Tesla Model Y on the same platform as the newly-launched Model 3.

"This is insane", he added.