Although Tesla fell far short of Wall Street estimates for earnings and revenue, the company showed progress in increasing its production capabilities, which have long been an issue for the electric automaker.  With these improvements, Tesla said it is on track to deliver 50,000 vehicles in the latter half of this year.  Tesla shares wavered in trading after the closing bell.  The company reported a second-quarter adjusted loss of $1.06 per share on $1.56 billion in sales. Analysts, on average, expected Tesla to post a loss of 52 cents a share on revenue of $1.62 billion, according to Thomson Reuters.  The company's cash and cash equivalents climbed to $3.25 billion, fueled in part by a $1.7 billion second public offering, and deposits on Model 3 orders. The company expects to log another $2.25 billion in capital expenditures this year to support its accelerated Model 3 production schedule.  In a letter to shareholders, Tesla said that it finished the second quarter consistently making 2,000 vehicles per week. For the entire quarter, Tesla produced a record total of 18,345 vehicles, an 18 percent increase over the first quarter and up 43 percent over the second fiscal quarter of 2015. Nearly half of the cars it produced occurred in the final four weeks of the quarter.  Tesla said it delivered 14,402 new vehicles, consisting of 9,764 Model S and 4, 638 Model X, which was higher than the company stated in its July production update.  With the improvements in vehicle production efficiency, Telsa said it expects to make 2,200 vehicles a week by the end of the third quarter, and 2,400 a week by the end of the fiscal year.  Meanwhile, new vehicle orders rose 67 percent over the same quarter last year.  Tesla also is seeing increased demand from customers who want to lease their vehicles, and it expects direct leasing to rise from 8 percent of deliveries in the second quarter to about 15 percent of deliveries in the third quarter. While this trend is not surprising given the high cost of the Model S and Model X, Tesla will need to strike new deals with lenders to fund the program.  In its letter to shareholders, Telsa said it had reached its funding limit with a banking partner for its leasing program, but it expects to add new partners in order to continue to sign new leases.  Tesla said it completed the design phase for its Model 3, which it is being marketed as a more affordable version of its high-end cars. Some production equipment for the Model 3 is ready, and Tesla will begin building the body and general assembly centers later this year.  The construction schedule for the Gigafactory manufacturing facility is on track to support volume Model 3 production in late 2017, the company said.  Favorable pricing for the Model S, which rose 3 percent sequentially, and improved manufacturing for the Model X, helped Tesla report "strong" sequential gross margin increases. On a GAAP basis, its automotive gross margin was 23.1 percent. On a non-GAAP basis, gross margins increased 200 basis points from first-quarter to 21.9 percent.  On Monday, the company formally announced its intention to acquire SolarCity, after first proposing the deal in June. The move signals that Tesla is trying to move from being an electric car company to a broad sustainable energy business by offering a wide range of integrated products.
The electric car maker says is seeing increases in demand for its vehicles, and plans for its Model 3 are on track.