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UPDATED: 7/31/14 7:36 pm ET details added

Tesla Motors Inc. net loss widened to $61.9 million in the second quarter even though it assembled and delivered record numbers of Model S electric cars and posted a nearly 90 percent increase in revenue.

The company second quarter loss compares with a $30.4 million loss a year earlier. Revenue in the latest period surged nearly 90 percent to $769.3 million from $405.1 million.

Tesla said Model S deliveries worldwide totaled 7,579 and production reached 8,763 units, both records, in the second quarter. It added it was to keep pace with increased demand in North America and Europe.

The losses were fueled by r expenses that more than doubled to $107.7 million from $52.3 million as Tesla accelerated engineering work on the forthcoming Model X crossover, which Tesla said would go into production next spring.

Tesla said it expects to have operational prototypes of the crossover ready next week for production design validation, and functional prototypes on the road for further late stage testing by the first quarter.

Asked about the company ballooning r costs during a conference call with analysts, Tesla Motors CEO Elon Musk said Thursday the company is working on more than just the Model X.

[capital expenditures] and r numbers are better than they appear because we working on stuff you don know about, Musk said.

Musk said demand for the Model X is already strong. He said the company is it, or withholding details about performance, features and on sale date from interested customers, to support Model S sales.

There is huge interest in the Model X around the world, Musk said, adding will not have a demand issue. upgrade

To meet growing Model S demand and to prepare for the Model X, Tesla said it added production capacity at its assembly plant in Fremont, Calif., by installing a new final assembly line and additional automation in the body shop. With the expansion, Tesla said output will rise to 1,000 vehicles per week starting in the fourth quarter and 100,000 cars a year by the end of 2015.

Production on the updated line begins next week.

Prior to the two week shutdown to retool the assembly line, Tesla was assembling 800 Model S sedans per week. The company said the temporary shutdown will result in about 2,000 fewer units of Model S output in the third quarter.

Tesla says the expansion will keep it on track to hit a goal of delivering 35,000 units of the Model S this year.

During the call, Musk said in the first quarter next year a new body assembly line will be installed in the plant. The company will also significantly upgrade the Fremont plant paint shop to become most advanced automotive paint shop in the world, he said.

That expansion will increase capacity to 2,500 units per week,
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though it will ramp up to that level over the course of 2015, Musk said.

Tesla plans and manages its business using nontraditional accounting methods outside generally accepted accounting principles.

By Tesla own measures, the automaker posted net income of $16 million on $858 million in revenue in the second quarter.

Non GAAP financial results exclude stock based compensation and noncash interest expense, and add back the deferred revenue and related costs for cars sold with a resale value guarantee.

Tesla has posted only one quarterly profit on a GAAP basis in the first quarter of 2013.

Gigafactory to Reno?

Tesla said it broke ground on a site just outside of Reno, Nev., in June that potentially be the location for the Gigafactory, the large scale battery manufacturing plant that Tesla plans to operate alongside battery supplier Panasonic.

The plant is expected to help reduce battery costs and support production of Tesla third EV, the $35,000 Model III and could employ up to 6,500 people by 2020.

During the conference call, Musk said that Tesla has essentially completed the gigafactory construction pad at the site outside Reno, NV, adding that Tesla will complete similar projects in or two other states. company says it still evaluating alternative sites in California, Arizona, New Mexico and Texas for the factory and plans to make final decision on the battery plant location in the few months once details about partnerships, timing and economic incentives are finalized.

made sense to have multiple things going in parallel. Before we actually got to the next stage of pouring a lot of concrete, we want to make sure that we have things sorted out at the state level that the incentives are there that make sense and that are fair to both the state and to Tesla, Musk said during the call. this point, the ball is in the court of the governor and the state legislature. the call, Musk said that the gigafactory will require about $4 billion in investment to reach a level of production, before further expansions would increase the factory total cost to around $5 billion.

Of the initial $4 billion, Musk said about 40 percent to 50 percent would come from Tesla, Panasonic would cover 30 percent to 40 percent, state incentives would contribute 10 percent while another 10 percent to 15 percent would come other suppliers and partners at the site.

Tesla said it expects to invest up to $950 million this year as it “slightly” accelerates spending on more production capacity and the battery factory. That about $100 million than previously announced.

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