Tesla is going through one of the biggest challenges in its history. On Wednesday, the company will release its first quarter 2018 earnings results, followed by a conference call with analysts to provide more details on the company’s trajectory. Questions are likely to focus on Model 3 production, but there may also be questions about full autonomy development as well as the Model Y sports utility vehicle.
Listeners will want more details about Tesla’s product lines and future plans, but some surprises could crop up during the call. Musk has already confirmed that Galileo Russell, a writer at SeekingAlpha and CEO of Hyper Change TV, will join the usual roster of sell-side analysts to get the chance to ask one crowdsourced question relevant to retail investors. Over 150 shareholders representing $18 million in shares asked Musk to take Russell’s question.
Rob Maurer, the producer of the Tesla Daily podcast and one of the shareholders involved in the campaign, tells Inverse why this is a big moment for the group:
It’s exciting to see Tesla and Elon respond to a crowdsourced effort by retail investors to get a representative on the call. Many times, analysts on the calls are asking short-term questions related to formulating their 12-month price targets. A different perspective with questions that are more relevant to retail investors, many of which have investment time horizons of a decade or more, can only be beneficial. It’s a great example of a forward-thinking company responding to its stakeholders, as well as an interesting demonstration of what new media, social platforms, and crowdsourcing can accomplish.
Another surprise that could crop up is a question around Musk’s couch, after a campaign raised money from 592 people to buy him a better place to sleep.
Here’s what else to watch out for and how to listen:
What to Look for
One of the big questions will be whether Tesla needs to return to the markets to raise capital this year. This is largely dependent on whether the company has pulled through “production hell” for the Tesla Model 3, after producing around 202 Model 3s per week in the last quarter despite expecting to reach 2,000 per week by December. This is important because around 400,000 people have placed $1,000 reservations, and Tesla needs to produce cars to convert those into full orders starting at $35,000. Goldman Sachs claimed that a rate of 1,400 per week was likely for this quarter, which would mean Tesla running out of cash. A leaked e-mail from Musk suggests the company has reached a rate of 2,000 per week with the potential to reach 6,000 in June.
Beyond the Model 3, investors will want to know more about Tesla Autopilot. The semi-autonomous driving system was meant to meet the previous Mobileye system’s functionality just months after its October 2016 launch. That didn’t happen, and Tesla agreed on Tuesday to reimburse users between $20 and $280 for the delays. Tesla currently sells a $3,000 add-on to enable full self-driving capabilities on these cars in a matter of months, but the company’s handling of the previous rollout may leave investors questioning whether Tesla can meet this deadline.
Another question is whether Musk will remain in his position as both chairman and CEO. Shareholder Jing Zhao submitted a proposal that was published last week, which would place an independent director in the role of chairman if the plan is approved at the company’s next annual shareholders’ meeting on June 5. The board is advising a vote against the proposal, stating it “would not serve the best interests of the Company or its stockholders.”
Investors will also want to know about Tesla’s future projects, and there are a lot of them:
- Tesla Model Y sports utility vehicle, an entry-level version of the Model X.
- Tesla Semi electric truck, unveiled in November and set for launch next year. Rival Nikola Motors is suing Tesla for $2 billion over its design.
- A second-generation Tesla Roadster, unveiled at the Semi launch with a 2020 release date.
- A series of “megachargers” placed every 400 miles in the United States to charge the Semi truck in a matter of minutes.
- A performance-focused version of the Tesla Model 3.
- Three more “Gigafactories” to produce all these products.
How to Listen
Listening to the call is easy. It’s set to start at the following times:
- 2:30 p.m. Pacific time
- 5:30 p.m. Eastern time
- 10:30 p.m. British Summer time
- 11:30 p.m. Central European time
- 5:30 a.m. China Standard time (Thursday)
- 7:30 a.m. Australian Eastern time (Thursday)
You can follow the instructions below to get connected:
- Go to the Tesla investor relations event page, linked here. You should see a listing for the first quarter 2018 results, followed by a link to the webcast.
- Follow the webcast link. At this point, you will see the option at the bottom of your window to test your setup. The site will display a checklist for compatible browsers, screen size, relevant plugins and connection speed. It’s best to complete this test with no other applications using the internet connection.
- When you’re done testing, return to the first screen. Enter your first name, last name, and e-mail address. The company field is optional.
- Click submit, and you’ll be taken to the conference call.
And that’s all there is to it! The call normally starts with a brief catchup on events, followed by a question-and-answer session. It’s during this second part where Musk and the team will likely reveal the most interesting tidbits.