Electric carmaker Tesla Motors said it would accelerate production to meet strong demand for its upcoming Model 3 mass-market sedan, but higher spending will make it harder to reach promises of profitability this year.

Tesla shares rose more than 5 per cent to $234.70 in after hours trade on Wednesday after the company said it was on track to deliver 80,000 to 90,000 electric vehicles this year and vowed to reach an annual production target of 500,000 cars in 2018, two years faster than expected.

Tesla reported a wider first-quarter net loss, although results broadly beat Wall Street targets.

But a 50 per cent rise to $2.25 billion for 2016 capital expenditures, and a suggestion the company might need to tap the capital markets, underscored cash hurdles for the Silicon Valley company led by Elon Musk.

"Increasing production five fold over the next two years will be challenging and likely require some additional capital but this is our goal," Tesla said in a statement.

Tigress Financial Partners analyst Ivan Feinseth, who rates Tesla shares "neutral" said growing pains were to be expected while Tesla ramps up, but the company's cars were "close to perfect."

"It's going to be challenging, making cars is hard and there are all sorts of moving parts and competition will come from known and unknown places," said Feinseth.

"I will suggest it's going to take a lot of capital. But car manufacturing is a capital intensive business. (Musk) has had no problem raising money in the past."

The Model 3 sedan, set to go into production in late 2017, has generated massive interest since its unveiling on March 31.

But some analysts have questioned whether Tesla could smoothly and quickly transition to higher-volume production, given the rocky start for the company's Model X sport utility vehicle. That technology-heavy crossover faced problems including parts shortages and quality issues, such as non-fastening doors.

Standard and Poor's Global Market Intelligence analyst Efraim Levy said the 500,000 unit production target sets a very high bar for Tesla.

"I would be betting that they don't make it," he said.

Tesla said on Wednesday that two top manufacturing executives were leaving the company.

The company said its net loss widened to $282.3 million, or $2.13 per share, in the first quarter ended March 31, from $154.2 million, or $1.22 per share, a year earlier.

Excluding items, the company lost 57 cents per share. Analysts had expected a loss of 58 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose to $1.15 billion from $939.9 million. – Reuters