Tesla Inc. (TSLA) announced Wednesday its earnings for the fourth quarter of the fiscal year 2016. Although the company did not report a profit, it did cut down on its losses.

The company reported a loss of 69 cents a share, or $121.3 million, in the quarter ending Dec. 31 — down from a $320.4 million loss in the same quarter last year. 

“Our capital expenditures came in below plan as we continue to negotiate more favorable payment terms with our capital equipment suppliers, pushing some payments closer to the start of Model 3 production and some payments beyond the start of production,” a Tesla shareholder letter signed by CEO Elon Musk and Chief Financial Officer Jason Wheeler said. 

The company has made its original Gigafactory operational, but it is far from being completed. In addition to Gigafactory 2, which is also operational, the company said it aims to start scouting locations for two, even three more Gigafactories later this year. 

Share prices rose once the company announced that the production of its upcoming mass-market car, the Model 3 is on track. It reported a revenue of $2.28 billion, topping analysts' estimate of $2.2 billion and up 88 percent year-on-year. However, the yearly growth was less than last quarter’s 145 percent. The company’s SolarCity operations also contributed to the results from its acquisition on Nov. 21 to the quarter’s end on Dec. 31.

One of the major developments Tesla’s fourth quarter report speaks about is the company’s production of its first mass-market car, the Model 3. The program is on track to start limited vehicle production in July and to steadily ramp it up until September, by which time the company expects to produce 5,000 vehicles per week, going up to 10,000 vehicles in 2018.

Tesla expects $2 billion to 2.5 billion in capital expenditures ahead of Model 3 production, “while also investing in battery cell, pack and energy storage production at Gigafactory 1,” according to its earnings report.

During Q4 2016, Tesla reported $522 million in capital expenditures in preparation of the Model 3 production.

Tesla also claims that it will deliver 47,000 to 50,000 Model S and Model X cars to consumers by the first half of 2017 — a growth of 61-71 percent compared to the production of the same cars in the 2016, when Tesla fell short of its goal of delivering 90,000 cars and was able to deliver only 76,300.