A Tesla Model 3 sedan, the company's first car aimed at the mass market, is displayed in Hawthorne, California, March 31, 2016. Joe White/Reuters

Tesla Motors Inc. shares dropped Thursday after investors digested the company’s first quarter sales report saying the company will spend more than previously stated this year to speed up production of the Model 3, the company’s lower-priced electric sedan.

The share price rose in after-hours trading Wednesday and opened higher Thursday, but by the end of trading was 5 percent lower, to $211.53, a nearly two-month low. It extended losses after the closing bell in New York.

In its first quarter 2016 shareholder letter, Tesla said it plans to build 500,000 cars a year by 2018 instead of 2020 after it received hundreds of thousands of pre-orders within days of unveiling a working prototype of the $35,000 Model 3.

The new production schedule wipes out the company’s previously stated forecast of turning a profit based on generally accepted accounting principles, or GAAP, by the fourth quarter and increases the likelihood Tesla will need to raise more money sooner.

During the fourth quarter 2015 conference call, CEO Elon Musk said he expected his company to be “profitable by GAAP standards in Q4 of this year.” But on Thursday, Musk and Chief Financial Officer Jason Wheeler said in their letter to shareholders they now anticipate spending about $2.25 billion this year, up from a previous forecast of $1.5 billion.

“Given our plans to advance our 500,000 total unit build plan, essentially doubling the prior growth plan, we are re-evaluating our level of capital expenditures, but expect it will be about 50 percent higher than our previous guidance of $1.5 billion for 2016,” the letter said. “Naturally, this will impact our ability to be net cash flow positive for the year, but given the demand for Model 3, investing to meet that demand is the best long-term decision for Tesla.”

Deutsche Bank automotive equity analyst Rod Lache said Thursday in a note the company’s “propensity for aggressive projections” suggests it may not reach the 500,000 target by 2018. He maintained his “hold” rating on Tesla, but raised his 12-month price target to $290 from $280.

Tesla’s shares fell Wednesday before the earnings report was released after Bloomberg news reported the departure of two high-level executives. The company has seen an increase in executive exits in the past year.