Tesla Model S

Tesla Q3 Earnings: What to Watch beyond the Numbers

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Apr. 23 2021, Updated 2:47 p.m. ET

  • Tesla’s third-quarter earnings are scheduled for Wednesday. The company delivered a record number of cars in the third quarter.
  • However, when it comes to Tesla’s earnings, higher deliveries don’t necessarily translate into higher profits. In the second quarter, the company delivered a record number of vehicles but ended up posting a wider-than-expected loss. The stock fell after the company’s second-quarter earnings release.
  • When it comes to Tesla’s earnings, we have to look beyond the hard numbers. We’ll explore some of the aspects that investors might watch in the company’s third-quarter earnings call.
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Tesla’s third-quarter earnings

Tesla’s (TSLA) third-quarter earnings are scheduled for Wednesday. The company will likely post a loss in the quarter. If analysts’ estimates are correct, the company will post a loss for the third consecutive quarter. Read Can Tesla Break Even in the Third Quarter? to learn more. We’ll discuss some of the other metrics and updates that markets will watch in Tesla’s third-quarter earnings call.

Production forecast and China Gigafactory

Previously, Tesla expressed optimism that it would hit the 10,000 weekly production milestone by the end of 2019. During the company’s third-quarter earnings call, markets will watch for updates on the crucial milestone. Investors will also pay attention to Elon Musk’s comments about the progress in China Gigafactory’s mass production. Notably, China Gigafactory will be Tesla’s first operational plant outside the US. The plant is a key asset for the company. China is the world’s largest automotive market. Analysts might question Musk about the recent downtrend in China’s NEV (new energy vehicle) sales. After rising at a steady pace, China’s NEV sales have contracted year-over-year for three consecutive months.

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Demand

During the last few months, some analysts raised concerns about Tesla’s US demand. During the third-quarter earnings call, analysts might question Musk about the organic demand scenario in the US. Markets will pay attention to Musk’s comments on Tesla’s pickup truck and Model Y. Musk sees Model Y as a key long-term driver. The model’s deliveries are scheduled to start next year. The company’s pickup truck will be unveiled soon. Ford (F) released a video of its electric F-150 pickup prototype earlier this year.

Recently, Tesla updated its pricing and booking fee structure. Musk might comment on the new structure during the company’s third-quarter earnings call. The new pricing might help the company achieve Musk’s vision of a profitable fourth quarter.

Tesla’s Solar Roof

Tesla’s Solar Roof has been in the news in the last few months for the wrong reasons. There have been fires in the solar panels. During the third-quarter earnings call, Musk might discuss the fire incidents and how the company plans to address the issues. Amazon (AMZN) and Walmart (WMT) have complained about fires in the solar panels.

Robotaxi

Musk has big plans and forecasts for Tesla’s Robotaxi. There might be questions related to the Robotaxi during Tesla’s third-quarter earnings call. Recently, the company updated its software to offer the Smart Summon feature. Through the feature, a driver can summon the parked car to his location. Tesla has been making several updates to its Autopilot features. However, the company’s autonomous driving isn’t perfect. Apple (AAPL) and Alphabet (GOOG) are also investing in autonomous driving technology.

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