While other automakers struggle to push quarterly profits higher, Tesla Motors' (TSLA) - Get Report co-founder Elon Musk seeks ever to enlarge the scope of his vision, promising a fossil-free future as tomorrow's payoff in return for massive current losses.
Tesla's second-quarter results are expected to be a variation on this theme, with losses reaching 52 cents a share, compared with 48 cents in the year-ago period.
Though investor attention will be focused on specific Tesla results, such as an expected $1.6 billion in quarterly revenue, 36% higher than last year, much notice also will be directed at the company's pending $2.6 billion merger with SolarCity (SCTY) .
In theory, the blending of Tesla's vehicle and battery manufacturing operations with SolarCity's electricity generating solar products could make sense, if you buy into the threshold premise that oil, gas and nuclear power can and should continue to diminish in favor of renewable energy.
Analysts, including those who have stood by Musk, Tesla's chief executive, have expressed caution about the merger, warning that it could strain the automaker's finances, which depend on continued sale of shares.
"While we agree with the long-term and 'big idea' merit of a TSLA/SCTY combo, we still question the near-to-mid-term impact given solar/storage economics and the effect this could have on cash flow as TSLA tries to ramp Model 3 and Gigafactory," said Joseph Spak of RBC Capital Markets.
The Model 3 is a mass-market electric sedan, slated to debut next year; Tesla's Gigafactory in Nevada manufactures lithium-ion batteries. The deal is subject to shareholder approval and is expected to close in the fourth quarter.
Musk believes that the two businesses can together save on costs, appeal to the same customers and actually operate in tandem, with some homes using solar energy to charge cars.
Perhaps. Spak says the long-term vision is a correct one, yet the short-term burn of cash also will be bigger should the two companies combine. RBC Capital Markets' price target for Tesla shares is $210 -- below Tuesday's closing price of $227.20.
Tesla has chronically missed its production forecasts, attracted government scrutiny following a fatal crash involving its AutoPilot autonomous control and, in the past week, parted ways with key supplier of vision processing and software, Mobileye (MBLY) .
None of these negative developments has seriously crimped the pricing of Tesla shares or subdued Musk's outsize plans and ambitions. He most recently confirmed that the company intends to develop several new vehicle types, including a minibus, pickup truck, small SUV and semi-trailer -- requiring billions in additional investment.
Since its initial public offering in July 2010, Tesla shares have risen more than 1,000%, making it one of the most closely watched, vigorously debated and enthusiastically shorted equities. In the past year, shares have fallen 14.6% in value.
Doron Levin is the host of "In the Driver Seat," broadcast on SiriusXM Insight 121, Saturday at noon, encore Sunday at 9 a.m.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.