Tesla reports a smaller loss than expected, says Model 3 production is on track to hit targets

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Tesla on Wednesday reported a smaller quarterly loss than expected, and said production of its Model 3 sedan remained on track to hit targets.

The electric-car maker reported a loss of $US1.33 per adjusted share on revenue of $US2.79 billion. Analysts had forecast that Tesla lost $US1.88 per share and earned $US2.51 billion in revenue, according to Bloomberg.

The results came right after Tesla’s big event on Friday, launching the mass-market Model 3.

In the earnings letter, Tesla said it averaged over 1,800 net Model 3 reservations daily, and was confident it could produce just over 1,500 vehicles in Q3. Deliveries to non-Tesla employees would start in the fourth quarter, Tesla said.

Tesla had said it planned to produce 500,000 vehicles annually by 2018 and would ramp up costs to meet that goal. The company burned through $US1.16 billion in cash in the second quarter, up from $US144 million a year prior.

Analysts at Morgan Stanley and Baird were focused on vehicle demand, especially since the Model 3 could cannibalise Tesla’s older cars. “Although too early to draw strong conclusions, we are seeing an even further increase in net Model S orders since the July 28th event,” Tesla said.

It hasn’t been a great year for traders who bet against Tesla’s stock, following a 52% surge in the stock price year-to-date through Wednesday’s market close. Short interest in Tesla — or bets that its shares would fall — fell to the lowest level in more than 2 1/2 years relative to shares outstanding, according to data compiled by IHS Markit.

Tesla shares gained as much as 3% in extended trading after the results crossed.

Tesla CEO Elon Musk taunted short sellers on Twitter, but equally had to defend the company’s $US53 billion valuation.

Get the latest Tesla stock price here.