Editors' pick: Originally published Feb. 10.
For Tesla (TSLA) investors, Wednesday's fourth-quarter earnings report isn't just about the results -- it's about the company's future and, perhaps even bigger than that, the future of the electric vehicle industry.
Tesla is expected to detail more of its plans on the Model 3, the company's $35,000 mass-market vehicle that is slated to go up against the likes of General Motors' Chevy Bolt. Depending upon which state a customer lives in, the Model 3 could cost as little as $25,000, thanks in part to tax incentives, according to a Bloomberg report.
CEO Elon Musk and team have repeatedly said the future of the company rides (pun intended) on the Gigafactory and the Model 3 coming online together within a few months to make electric vehicles a competitive alternative to internal combustion engines.
In a March 2015 interview with TheStreet, Tesla's communications chief Ricardo Reyes said, "We're ahead of schedule," though he noted that changes between on-schedule and ahead-of-schedule depending on the week. When asked for a more specific date for the Gigafactory's completion, Reyes said late 2016 or early 2017.
On the company's third-quarter conference call in November, Musk said both the Gigafactory and Model 3 are on schedule.
However, Wall Street isn't so sure that plan is going to happen the way Musk and Tesla want.
Tesla has come under fire in recent weeks from those covering it, most notably Morgan Stanley analyst Adam Jonas, who has previously been among the most bullish on Tesla on Wall Street. On Feb. 1, Jonas cut his price target by more than a quarter, noting "lowered volume expectations for Model X and Model 3, a lower valuation for Tesla Energy, and accelerating competition in the mobility business."
In cutting his price target, Jonas said he now expects a late 2018 launch for the Model 3, which is a year later than the company is targeting. "Low demand for electric vehicles categorically and globally in a $30 oil environment leads us to reduce volume assumptions for the Model 3, which we anticipate will achieve an ATP [Average Transaction Price] of $60k or more," Jonas wrote to investors.
Tesla is slated to show off the Model 3, which will likely have a range of 200 miles or more, in March.Palo Alto, Calif.-based Tesla is expected to earn an adjusted 8 cents a share on $1.79 billion in revenue, according to analysts surveyed by Thomson Reuters. By comparison, Tesla lost an adjusted 13 cents on $1.095 billion in revenue in the year-ago quarter.
For now, though, all eyes will continue to focus on the Model X ramp, which has been slower than many expected at the launch.