Tesla enters its early May first-quarter earnings report (or loss report...) under some of the most intense investor and media scrutiny arguably since it was founded. The scrutiny is mostly thanks to the lightening rod that is Musk, who has joked about bankruptcy on Twitter and promised to produce 5,000 Model 3s a week by the end of the second quarter. Keep in mind that promise comes despite Musk's long history of missing production goals and this week's halting of Model 3 production to fix processes.
Sprinkle in speculation of unsafe working conditions at the company's Gigafactory and sub-par Model 3 product quality, and Tesla investors have a lot on their minds right now. They are probably even wondering whether to still trust Musk following new claims made in a securities class action lawsuit.
Here are ten questions long-time auto analyst Joseph Spak at RBC Capital Markets thinks investors should be asking themselves.
What Is the Current Production Rate?
"How does indications of less automation and downtime affect the ramp. Recent indication is Tesla still ramping to 5,000/week by 2Q18. We model Model 3 2Q18 exit production rate closer to 2,700 and the 2018 exit rate at 6,000/week and broadly we sense investor expectations have been lowered. So if Tesla executes closer to plan, this could propel the stock."
The Impact of Automation?
"If Tesla uses less automation, what does that mean for their previous ramp, capacity and long-term margin forecasts? Since a point of automation was belief in higher velocity, we have to believe internal forecasts slower/lower than prior."
Did Tesla Squander a Competitive Opportunity?
"Investors increasingly concerned about competition from European manufacturers. We wonder if Tesla regrets pursuing Model 3 ahead of Model Y."
How Much Did Model S/X Gross Margins Improve During Quarter?
"Tesla expects improvement based on mix. We model 25% by 4Q18."
Big China Opportunity?
"China will end foreign ownership caps on companies making fully electric (and PHEV) in 2018. This is likely positive for Tesla and we want to hear about China capital expenditure/expansion plans and timelines."
Tesla Behind in Autonomous?
"We sense investor perception is that a greater gap vs. a Waymo (and others) exists than previously assumed. Commercial/business model questions as well as others first pursue TaaS."
Services Doing OK?
"How did footprint handle recent 123,000 Model S recall? Are they ready to support mass-volume Model 3?
Tesla Semi Still on Track?
"Any update on specs, timeline or where produced?"
What's Up With Solar?
"1Q18 should look good given recognition of Australian project. But it's been a while since we've heard of longer-term aspirations. What is status of solar roof?"
Does Tesla Need Money?
"Elon says not needed as free cash flow will be positive in 2H18. We tend to agree on necessity, though wonder if they should raise capital (while available) anyway for risk mitigation."
Read TheStreet's full Tesla coverage here. TheStreet recently critiqued Musk's tweeting, watch below.