4 Questions Ahead of Tesla's Big Model 3 Earnings Call

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Tesla is set to report its latest quarterly earnings on Wednesday, and it could prove a big moment for the company. As CEO Elon Musk pulls the firm out of one of its biggest “bet the company” moments, Model 3 production has started shifting to accommodate new performance editions as more buyers receive the company’s cheapest ever electric vehicle.

It’s been a tense time for Tesla, and it could show in the earnings call. In the May quarterly call, Musk was criticized for dismissing questions from Bernstein analyst Toni Sacconaghi and RBC analyst Joseph Spak as “boring,” “boneheaded” and “so dry,” which he later blamed on the fact that the information was already available and the analysts were trying to justify their negative positions. Stock dropped almost five percent after the comments. Earlier this month, Musk drew criticism for referring to a Thai cave rescue helper as a “pedo,” leading to multiple investors warnings that his outbursts could negatively affect Tesla.

Beyond further outbursts, here’s what else analysts will be listening for:

4. What Is Happening With Model 3?

Signs suggest that it’s been a good quarter for Tesla, but there’s only one way to know for sure. Musk claimed at the start of this month that Tesla produced 7,000 cars in one week, exceeding its goal for both overall production and for Model 3 production, jumping from 2,000 at the start of March to 5,000 at the end of June. Tesla has a backlog of around 400,000 $1,000 Model 3 reservations, and Musk claims it received 5,000 net orders for the Model 3 in just one week.

Musk told Bloomberg that a production increase like the one seen with the Model 3, which saw Tesla produce overall around two-and-a-half times more cars per week than it did 12 months ago, is unlikely to happen again. Investors will want details about this jump.

3. Where Is Full Self-Driving?

The promise of fully autonomous driving is something of a legend around Tesla’s public persona. The firm started shipping cars with the necessary sensors for full autonomy in October 2016, charging $3,000 to pre-order the necessary software update that could send a Tesla cross-country by the end of 2017. That deadline never came, and Musk admitted in February that he missed the mark on this. However, at the time he said that a more realistic timeframe to demonstrate a cross-country drive was between three to six months. This call could provide more details about the progress on its development.

2. When Will the Model Y Debut?

The cheaper alternative to the Model X is coming soon. Musk suggested at the start of July that the “Model Y” could debut in March, as the design is almost ready. Musk said in May’s earnings call that the car would be “a manufacturing revolution” and “incredible from a manufacturing standpoint, because we do not want to go through this pain again,” referring to the Model 3’s production. The call could provide details about the progress of this plan.

1. What Will Happen With Short Sellers?

Musk has expressed his distaste for short sellers, investors that stand to make a profit if Tesla’s stock price drops. In June, he said the followers would see their position “explode” after the Model 3’s delivery report went live. Later that month, he listed the short sellers among oil firms and others that want Tesla to fail. Earlier this month, a prominent short seller quit writing about the company after Musk threatened to sue.

If Musk is right, short selling may prove a less lucrative position after the call.

How to Listen to Tesla’s Q2 2018 Earnings Call

Tesla’s earnings call is 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)

Here’s how to get connected and listen:

  • Go to the Tesla investor relations event page, linked here. You should see a listing for the second 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 it! The call normally lasts for just over an hour, with the first 15 minutes or so covering the questions followed by a lengthy question and answer session.

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