Tesla (NASDAQ: TSLA) will release its earnings report after market close on Wednesday this week, in what might be the most anticipated call of this earnings season. Tesla has been on a historic run as of late, dominating the news cycle and causing a considerable amount of ire amongst its ever-expanding pool of short-sellers. This beaten-down bunch will hope for an oasis of poor performance for relief in a desert of soaring stocks, Cybertrucks, and smug CEOs.
Let’s look at some of the key factors which Tesla’s earnings report will hinge on.
Tesla’s delivery figures are a constant point of contention amongst investors, with the company having a track record of setting overly ambitious targets and falling short. This time around, Musk’s guidance around delivery targets will be highly scrutinized for different reasons. With tax credits for electric vehicles being abolished and 18 electric vehicles set to launch from Tesla’s competitors in the U.S., Ford (NYSE: F) and General Motors (NYSE: GM) amongst them, there is set to be a squeeze on the carmaker’s domestic dominance.
While international expansion is at the forefront of everyone’s minds with the success of the Shanghai Gigafactory and entry to the EU market in the form of a similar plant in Berlin, the U.S. remains Tesla’s biggest marketplace. The stock jumped at the start of the year when it was announced it had sold approximately 367,500 cars for the year, meeting targets of 360,000-400,000. Investors will want to see significant expected growth from these figures, in spite of increased domestic competition.
Shanghai Gigafactory’s Performance
One of the factors behind Tesla’s incredible recent rally was the success of its newly opened plant in Shanghai. Investors reveled at the speed of which the factory went from blueprints to producing Model 3’s for the Chinese market. With the world’s largest electric vehicle market, good government relationships and a production line which is producing 1,000 cars a week, Tesla’s Chinese plant is seen by many as the key to its rapid growth.
With a goal of tripling output from the factory to 3,000 vehicles a week, more detailed information on production goals for 2020 from the plant could send the stock to new heights.
The Model Y
With plans to launch the Model Y in 2020, Tesla may use this earnings report as an opportunity to release more news to the public about the newest addition to its fleet. Any and all information about the production of a new range of vehicles is eagerly anticipated. With increased competition domestically and internationally, companies like NIO (NYSE: NIO) and BYD are commanding a growing market share in China, diversity in its product offerings will be an important factor in retaining its market dominance in the electric vehicle industry.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.
Content Manager at MyWallSt
Michael's first and favorite stock is Square, which he sees becoming a massive player in the payments industry and a leader in the war on cash.