There are 3 critical things we'll be looking for in Tesla's earnings
Analysts expect a $0.56-per-share loss, according to Bloomberg, but a 33% bump in revenue over the same quarter last year, to $1.24 billion.
No one following Tesla anticipates any surprises here. Tesla should be bringing in more money, as it sells more cars.
And Elon Musk's startup electric car maker should have lost money in the quarter, as it poured cash into launching a new vehicle, the Model X SUV, and the development of both the Model 3 mass-market car, slated for 2017, and a massive battery factory in Nevada.
So we can forget about the numbers and focus on some far more important pieces of information.
1. Deliveries, deliveries, deliveries
The Tesla story for the past two years has been one of a mad dash to the finish line in the final quarter. Tesla has three months to build about 17,000 cars, more than it has ever assembled in a single quarterly period. Last year, the company ran flat out and managed to satisfy its production goals, but it fell about 1,000 vehicles short on deliveries (Tesla needs to get a car in customer hands before it can book a sale).
This time around, the big question is whether Tesla will be able to produce and deliver the balance of the 50-55,000 output range it predicted earlier this year. Musk had already trimmed the projection from a solid 55,000 to 50-55,000. Now, it's not out of the question that Tesla won't hit the low end of that range.
This is moderately alarming. Tesla is a new automaker, selling a very different type of car, but the basics of constructing automobiles aren't that complicated. Tesla looks to be struggling to add 20,000 vehicles to last year's production. OK, they're building cars at one factory, in Northern California, at some remove from the main auto supply chains in the Midwest and the South. But pretty much every automaker in world that isn't doing fanciful bespoke machines with price tags of $200,000 and more can ramp up production by 10-20,000 units without breaking much of a sweat.
Bottom line: You can't sell cars that you haven't built.
2. The Model X won't make a meaningful contribution
The Model X is a hugely important car for Tesla, not least because the company finally has an SUV to sell in its main market, the US, where SUV sales are driving profits. But as far as the rest of 2015 goes, talking about Model X deliveries will be a distraction for Tesla's management. The key is to execute on production and deliveries of the core vehicle, the Model S sedan.
In fact, Model X won't really make a major contribution to Tesla deliveries until 2017. This isn't much of a problem, as 2016 Model X production looks to be scheduled already: Tesla says that it will need the entire year to fulfill existing orders.
Actually, Model X will provide a lift in one vital way: revenue. Priced well above $100,000, the vehicle should help keep Tesla's cash flow in acceptable shape.
Bottom line: Tesla is still all about the Model S.
3. Model 3 MUST stay on schedule
Model X was delayed by several years, but once Tesla began to build it in a serious manner in the middle of last year, it got on schedule and stayed on schedule. We saw prototypes undergoing road testing when we were supposed to, and the launch happened at the end of Q3 '15, just as Musk said it would.
Model 3 - a vehicle "platform" that will be used to build both a sedan and a compact SUV - is expected to see a design debut in early 2016, perhaps at the Geneva Motor Show. If we see then what the vehicle will eventually look like, it will be a positive signal that Tesla will have the car ready to launch in 2017. A critical factor will be the complexity of the design. The Model X was delayed, at least in part, by its exotic "falcon wing" rear doors and what Musk characterized as "sculptural" rear seat.
Musk called the X the hardest car in the world to build and, at the vehicle's launch, lamented that maybe Tesla shouldn't have put it together the way they did.
But the X is, after all, a very expensive luxury crossover SUV. Similar build problems with the Model 3, which is supposed to sell for $35,000, will be much harder to tolerate.
Bottom line: Tesla should have learned a lesson with the Model X: complexity can be nearly catastrophic.