SAN FRANCISCO (Reuters) - Tesla Inc reported quarterly revenue that doubled on Wednesday and a loss that was the electric car maker’s largest ever, but its shares rose after revealing more than 1,800 daily reservations for the Model 3 and predicting increased Model S deliveries in the second half of 2017.

Shares rose as high as 8 percent to $351.67 in late trade.

Despite a warning by Chief Executive Elon Musk last week that the Silicon Valley automaker would face six months of “manufacturing hell” in producing its first Model 3s, investors were enthusiastic over a remaining $3 billion cash on hand at the end of the second quarter, as loss-making Tesla spent just shy of $1 billion on capital expenditures, less than expected.

Still, given the continued build-out of the Fremont factory and Tesla’s Gigafactory battery plant in Nevada, the possibility of continued cash burn is high. Tesla said it plans $2 billion in capital expenses in the second half of the year, which would erode its cash cushion to about $1 billion.

Musk, however, told analysts on a conference call the company was considering debt to expand cash on hand, “but not thinking about a capital raise.”

Chief Financial Officer Deepak Ahuja said Tesla’s spending was at “historical highs,” amounting to over $100 million per week.

Model S demand was increasing, Tesla said, adding that Model S and X deliveries would rise in the second half of 2017.

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Musk said investors should have “zero concern” that Tesla would fail to reach its production target of 10,000 vehicles each week by the end of 2018.

Bullish investors - who sent Tesla’s share price up 77 percent from January to a June high of $386.99 - are betting on Musk’s strategy to transform the low-volume automaker into a clean energy and transportation company offering electric semi-trailer trucks, rooftop solar energy systems and large-scale battery storage.

MODEL 3 ORDERS

Tesla’s results came within a week of Tesla’s long anticipated Model 3 launch, where Musk revealed that first off the production line would be a $44,000 version of the car with a 310-mile (500 km) range. That is significantly higher than the $35,000 price most customers were anticipating, before incentives. That base model will begin production in January.

Elon corrected a statement he made at the event that Tesla had booked over 500,000 net reservations for the Model 3, changing that to 455,000.

Tesla will begin delivering Model 3s to non-employees in the fourth quarter, it said.

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As production improves, the non-GAAP Model 3 gross margin should be positive in the fourth quarter, Tesla said, eventually growing to 25 percent in 2018.

Revenue in the quarter rose to $2.79 billion from $1.27 billion, beating analysts’ average estimate of $2.51 billion, according to Thomson Reuters I/B/E/S.

Excluding items, the company lost $1.33 per share.

The company's net loss attributable to shareholders widened to $336.4 million, from $293.2 million a year earlier. (bit.ly/2uXmTL2)

On a per share basis, net loss attributable to shareholders narrowed to $2.04 from $2.09.

(This story has been corrected to show Tesla spent capital expenses of $1 billion, not $1 million, in latest quarter.)