Tesla is at a 'fork in the road' as EV competition heats up. Here's what the company's 3rd-quarter earnings have to show to woo investors, according to Wedbush.

• Tesla has reached a "fork in the road" moment as the company faces growing competition, Wedbush said.
• Analyst Dan Ives believes the company needs to assure investors that it can hit its long-term delivery growth target of 50%.
• "In the eyes of investors, patience is wearing extremely thin as the long-term vision and robot talk is not what the Street cares about now," Ives said.

Tesla is set to announce its third-quarter earnings after the market close on Wednesday, and it has a high bar to reach in order to win over investors, according to Wedbush analyst Dan Ives.

Tesla has had — like the rest of the broader stock market — a bad year. The stock has dropped nearly 40% year-to-date, and is down almost 50% from its record high reached in November.

The sharp decline means Tesla is at a "fork in the road" moment as it faces growing global competition in the EV space and hits road bumps in reaching its delivery targets, said Wedbush.

"Between logistical issues in China, supply chain problems, Full-Self-Driving black eye moments, the Musk Twitter fiasco, and EV competition increasing across the board there is growing pressure on Musk and Co. to prove themselves with third-quarter earnings," Ives said.

The company said earlier this month that it produced 365,923 vehicles and delivered 343,830 in the third quarter. The deliveries marked a new record but were below the nearly 358,000 vehicles expected in a Bloomberg survey of analysts.

Tesla is expected by analysts to deliver $1.01 in adjusted earnings per share on $22.1 billion in revenue for the third quarter, according to data from Bloomberg.

"The Street is starting to worry that the bloom is coming off the rose in the Tesla story with delivery shortfalls front and center," Ives said.

What's increasingly important for Tesla to prove in its earnings results that it can still hit its long-term target of delivering 50% in annual delivery growth, he said. For the company to do that this year, it would have to deliver upwards of 475,000 vehicles in the fourth quarter.

If Tesla can't reach that level heading into year-end, the company will have to "rip the band-aid off" and set a lower bar in the fourth quarter closer to 400,000 vehicle deliveries, according to Ives.

"For Musk in the eyes of investors, patience is wearing extremely thin as the long term vision and robot talk is not what the Street cares about now in this white knuckle period of market turmoil. Instead, show investors the path around unit growth of 2 million into 2023 and sustained profitability with China a key growth story," he said.

Otherwise, concerns could snowball for the company at a time when some expect Musk to sell more of his Tesla stock to fund his $44 billion acquisition of Twitter.

"We remain bullish as Tesla is one of our favorite long term disruptive names to own. However, for Musk the clock has struck midnight for the Street to stop the excuses and noise... now is the time to execute on reasonable growth and unit targets into the fourth-quarter and 2023," Ives concluded.