That said, the loss was hardly unexpected: In its first-quarter update, Tesla made it clear that while the company should become cash-flow positive later this year, short-term losses were inevitable. Bear in mind, the company said that just after it posted a quarterly net loss of more than $700 million, so the $406 million Tesla lost this time around seems relatively more palatable. That Tesla is significantly narrowing its losses is a good sign, though, especially when you consider that — prior to this quarter — the company struggled to actually deliver its vehicles to key markets like Europe and China.

Looking longer-term, though, Tesla is still confident that it can become fully profitable in the second half of the year, and that it can deliver between 360,000 and 400,000 vehicles by year’s end. That last bit might seem a little more questionable considering Tesla’s current sales velocity, but the fact that it’s gearing up to start producing the popular Model 3 in China could be a big help. Less helpful is the fact that, as of July 1st, the tax credit for buying a Tesla has dipped again. Would-be Tesla owners are now only eligible for $1,875 in federal tax credits, though individual states often have their own incentives for electric car purchases. (In Colorado, for instance, you can claim a $5,000 tax credit for buying an electric vehicle.)

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