Tesla reported a second-quarter loss even as it made record deliveries, prompting renewed questions about the company’s future in a year when investor concerns have already sent its stock plummeting.

Although Tesla’s revenue rose nearly 40 percent over the same quarter last year to $6.3 billion, the company still reported a loss of $408 million.

The results suggest Tesla is beginning to face a classic auto industry problem: narrower margins stemming from its mass-market offerings, which are becoming a popular alternative to its more expensive models.

In an earnings call following the disappointing quarterly results, Tesla CEO Elon Musk reiterated confidence in the mass-market Model 3 despite the continued lack of profits.

Tesla’s newer Model 3, the country’s top-selling electric car, was billed as the vehicle that would bring electric transportation to the masses. Its promised $35,000 price-tag would also make it available to a wider swath of the population, at less than half the cost of Tesla’s flagship $75,000 Model S. That strategy appears to be working, as the company said it has delivered more cars. The lowest-priced Model 3 for sale online starts around $39,000.

Tesla’s stock dropped nearly 11 percent to $236.10 in after-hours trading.

Musk sought to temper fears about the company’s long-term finances, despite the steep loss.

“From a profitability standpoint we expect to be probably around break-even this quarter and profitable next quarter," he said. “I feel pretty confident about that.” He reiterated his expectation that Tesla would deliver between 360,000 and 400,000 vehicles in 2019.

The automaker began the year on a disappointing note for investors, with a $702 million loss on $4.5 billion revenue in the first quarter of 2019, leading to concerns about sagging demand for its mass-market sport sedan. Tesla said it had been beset by delivery and logistics issues in its markets in Europe and China, a factor that pushed deliveries to the early part of the second quarter.

Tesla lost $700 million in the first quarter with Model 3 problems

The company at the time reaffirmed guidance that it would deliver between 360,000 and 400,000 vehicles in 2019.

The figures in the second-quarter earnings report weren’t all surprising, after Tesla reported at the beginning of July it had delivered a record 95,200 vehicles in the months from April through June. Demand concerns and fears about the direction of the company amid mounting legal and safety challenges had sent Tesla’s stock into a free fall late this spring, when Tesla bottomed out just under $177 per share, less than half its all-time high of nearly $390.

Tesla floats fully self-driving cars as soon as this year. Many are worried about what that will unleash.

But the stock began to climb again as Tesla hinted at the coming deliveries record, as well as hyping its upcoming “full self-driving” hardware. It also hinted at coming products such as an all-electric pickup truck and the already-announced Model Y crossover, based on the mass-market Model 3 platform. Industry safety experts and competitors have raised concerns about Tesla’s marketing of “full self-driving” capability, a technology suite it is promising to deliver to drivers as soon as this year.

The automaker has been accused of over promising with all-too-optimistic timelines for its product launches and software releases in the past, something Musk has himself admitted to.

Tesla also announced Wednesday that another member of Musk’s executive team, Chief Technology Officer J.B. Straubel, was stepping down from his role. Straubel, a Tesla co-founder, would continue to serve as a senior advisor, Musk said.

Straubel said the driving force for his departure from the role was “not a lack of confidence” in the company.

Musk thanked Straubel and lauded him as a catalyst for Tesla’s dominance of the electric vehicle industry. “If we hadn’t had lunch in 2003, Tesla wouldn’t exist basically,” Musk said.

Musk said Drew Baglino, Tesla’s vice president of technology, would take over the CTO role.