Tesla shares plunged on Thursday after the automaker reported a larger-than-expected quarterly loss despite record deliveries and an improved cash position.

CEO Elon Musk gave investors further cause for concern by announcing during an earnings call that Chief Technology Officer and co-founder JB Straubel will be moving to an advisory role — the latest departure from Tesla’s C-suite.

In trading Thursday, Tesla stock fell 14% to $227.63, heading for its biggest drop since November 2013, before rallying slightly to $228.53, down 13.7% on the day.

“We’d characterize the results as demoralizing,” said Garrett Nelson, an analyst with CFRA.

Tesla’s deliveries for the second quarter hit a record 95,356 vehicles, with production reaching a record 87,048 vehicles. “This is an important milestone as it represents rapid progress in managing global logistics and delivery operations at higher volumes,” the company said in its letter to investors.

Tesla’s loss narrowed to $408 million from $718 million a year ago, while sales rose 40% to $6.35 billion. Adjusted for one-time items, the company lost $1.12 a share, compared with a loss of $3.06 a share a year ago.

But analysts had expected Tesla to lose 40 cents per share on revenue of $6.41 billion.

Tesla attributed $117 million of the loss to restructuring costs but costs related to sales and servicing were way up, weighing on profitability. Gross margin, or the money left from sales after subtracting costs of goods sold, fell to 14.5% from 15.5% a year ago.

“For the bulls, this is a disaster story in terms of gross margin,” Dan Ives, managing director of equity research at Wedbush Securities, told CNBC. “You can sell more cars — [but] can you do it profitably? If not, ultimately this company will have to raise more capital next year.”

Tesla finished the second quarter with $5 billion in cash, largely due to a $2.7 billion capital raise in May. “This level of liquidity puts us in a comfortable position as we prepare to launch Model 3 production in China and Model Y production in the U.S.,” the company said.

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