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 auto maker.
With these improvements, Tesla said it is on track to deliver 50,000 vehicles in the latter half of this year, which reaffirms its previous guidance.
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. That's more than double the loss analysts, on average, were expecting. Thomson Reuters' consensus estimate called for a loss of 52 cents a share on revenue of $1.62 billion.
Telsa also continued to burn through cash as it invested in production improvements and the construction of its gigafactory in Nevada. But its cash position improved and stood at $3.25 billion as of June 30, fueled in part by a $1.7 billion offering in May. The company expects to log another $2.25 billion in capital expenditures this year to support its accelerated Model 3 production schedule.
Despite these results, Tesla investors remain much more focused on next year rather than these near-term earnings, said Ben Kallo, a senior research analyst at Robert W. Baird.
"I think this is actually what I call de-risking the quarter," Kallo told CNBC. "We got the quarter out of the way so now we got a couple months where Elon can start telling us more about the Model 3."
Kallo is looking for the new model to be introduced in the back half of this year, and when it is, it will be a positive catalyst for the stock.
Tesla said Wednesday 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 expects to begin building the body and general assembly centers later this year.
After the Model 3, the next priority will be developing the Model Y, a small crossover vehicle, CEO Elon Musk said during the company's earnings conference call. Musk said he expects strong demand for this vehicle in the range of 500,000 to 1 million units a year.