Tesla posts record $717 million net loss in second quarter

Tesla plans to profitably build up to 55,000 Model S cars in third quarter

Telsa's shares jumped 9.3 per cent to $US328.85 in after-hours trading.

"Very importantly, the Tesla self-driving chip technology that we've been working on for three years is finally coming to fruition", Musk said on Tesla's second-quarter earnings call . Margins went from nearly flat to 15 percent, still a ways off the 25 percent mark that CEO Elon Musk has called for. Tesla would use money generated from sales to fund big projects such as an estimated $2 billion new factory in China and another plant in Europe, he said. Tesla expects its Model 3 gross margins to "grow significantly" in its third quarter.

But Musk proved far more subdued during Wednesday's call, apologizing to analysts he had clashed with during the last call for being "impolite".

He explained he had been exhausted from working more than 110 hours per week last quarter. "Hope you accept my apologies".

Had it delivered the vehicle in June, the subsidy would have lapsed a quarter earlier, a strategic move applauded by Ross Gerber, chief executive of Gerber Kawasaki Wealth and Investment Management, which holds Tesla shares.

Tesla spent millions as it reached a goal of producing 5,000 Model 3 sedans per week by the end of June.

Notably, Tesla in its shareholder letter writes that it has been able to maintain a Model 3 production rate of 5,000 units per week. It now says production is rising, with the goal of 6000 per week by the end of August.

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"We like the more muted tone of the company's outlook, with the absence of unnecessary new stretch goals", said CFRA analyst Efraim Levy.

Model 3 production woes have been nearly legendary at Tesla. In Q2, the company delivered 18,449 Model 3 vehicles, up from 8,182 last quarter.

In another boost, the automaker said it has trimmed its capital spending by manufacturing the Model 3 on existing assembly lines, rather than building new lines. In a letter Tuesday to clients, billionaire hedge-fund manager David Einhorn criticized Tesla's manufacturing sprint and questioned "whether customers will be happy with the quality of a auto rushed through production to prove a point to short sellers".

Beyond operating costs, Tesla has paired down an initial $3.4 billion capital expenditure estimate for the year to a slimmer $2.7 billion. Analysts expected a loss of $2.92 per share on revenue of $3.92 billion.

After quietly upgrading its semi-autonomous driving suite, Autopilot, almost a year ago, Tesla has been working hard on its next-generation hardware.

It was the last financial update before the second half of the year, when Musk had vowed the company would be profitable.

The internet had its fair share of suggestions for the type of games that should come to the Tesla, including the hottest game of two years ago, Pokémon Go. Additionally, it seems Tesla is keen to get unique game content into its cars, as Musk also tweeted job opportunities for game developers.

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