Shares of Tesla Motors Inc. (NASDAQ: TSLA) opened down 9.5% Thursday morning, following the company’s disappointing earnings report Wednesday night. The stock closed at $201.35 and then opened at $182.25 Thursday.

For the first quarter, the electric car maker posted adjusted diluted earnings per share (EPS) of $0.12 on adjusted revenues of $713.0 million. In the same period a year ago, the company reported adjusted EPS of $0.12 on revenues of $561.8 million. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.10 and $699.1 million in revenues.

On a GAAP basis, the carmaker lost $0.40 per share, compared with a year-ago break-even first quarter. The significant one-time items included in the GAAP loss were $0.30 a share in stock-based compensation and $0.17 for deferred profit due to lease accounting.

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What probably hurt the stock most after earnings was the forecast statement that R&D spending will rise by about 30% sequentially and that SG&A expenses will rise 15%. Tesla said it expects to be “marginally profitable” in the second quarter, a far cry from the $0.27 EPS that analysts were expecting.

Tesla plans to invest $650 million to $850 million in its Gigafactory battery project, on expanding its service centers and Supercharger network and on forging ahead with its design for a Model X crossover vehicle. Cash flow will be negative for the year as a result, and investors reacted badly to the news.

Tesla boosted production by 15%, to “almost 700” vehicles a week and delivered 6,457 vehicles in the quarter. The company expects to deliver about 7,500 Model S sedans in the current quarter which would leave Tesla less than halfway to its full fiscal year goal of 35,000 deliveries.

The company plans to build 8,500 to 9,000 cars this quarter in order to fill the pipeline of products to Europe and China with 1,000 to 1,500 vehicles. As the pipeline fills, the gap between production and deliveries will close the company said.

The company’s leasing program is expected to encompass just 200 cars in the second quarter, but that number is expected to rise over time. The equity Tesla will need to finance its leasing program is also a drag on profitability.

Shares traded down about 8% at $185.49 in the first 15 minutes of Thursday’s trading, in a 52-week range of $55.71 to $265.00. Nearly a third of the stock’s daily volume of around 9 million shares had already changed hands. The consensus target price for the shares was around $227.40.

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