It’s been an interesting quarter for Tesla. Over the last three months, the electric carmaker surpassed Ford Motor’s market cap, discussed the development of semi-trucks, and delivered a record 25,000 vehicles—putting it on track to furnish 50,000 cars by mid-year as promised. Since January, Tesla’s stock has grown from roughly $216 per share to $317.08 per share.
This all looks well and good for the young car company, but judgment day is coming. Tesla will post its quarterly earnings tomorrow afternoon, and analysts are expecting Q1 losses of 81 cents per share on revenue of $2.6 billion. A year ago, it claimed losses of 57 cents per share on revenue of $1.6 billion.
There are two main questions investors will be looking to answer: How will Tesla make good on its lofty promise to manufacture 500,000 electric vehicles in 2018? And what will be the long-term impact of its acquisition of SolarCity?
First, the vehicles: So far this year, Tesla has produced about 25,418 vehicles. To raise production for 2018, it’s going to have to sink a considerable amount of cash into manufacturing. At the end of 2016, CEO Elon Musk said he planned to spend between $2 billion and $2.5 billion on kicking up Model 3 production, its more mass-market vehicle, which is expected to debut in July with deliveries to follow.
— Elon Musk (@elonmusk) April 13, 2017
As for SolarCity, the company will start taking orders for the unit’s sexiest product, solar roofing, in April. However, only two styles will be available, with another two to come online in 2018. While Musk has promised to focus on making Tesla’s solar business profitable, not everyone is convinced.
Last month, CNBC reported Bank of America analyst John Murphy gave Tesla stock an underperform rating, noting, “We believe the SolarCity acquisition introduces material risks to the longer-term viability of TSLA, while the recent capital raise only serves to further dilute potential shareholder value.”
Tesla will report first-quarter 2017 earnings on Wednesday afternoon after the closing bell. We’ll have a full report then and will be listening in on the earnings call for more updates.