Tesla Motors reports its 1st-quarter earnings Wednesday after the market close. In April, Tesla announced it had sold 4,750 Model S sedans in the quarter, exceeding its original guidance of 4,500 and putting the company on a path to achieving “full profitability.” Analysts are very eager to hear more details from CEO Elon Musk about that profitability, and much more. Here’s 5 things to look for in the earnings report.
1. Reservations & Cancellations: Is Tesla on track to meet its target of delivering 20,000 Model S sedans in 2013? How many reservations are there, and how many reservation holders cancelled? What’s the “churn” of reservations and cancellations?
2.Regulatory Credits: Tesla makes money, in part, because Model S sales qualify for California’s Zero Emission Vehicle credits, which Tesla can then use to sell to other automakers. Analysts want to know how much Q1 revenue came from sale of the credits; some estimate it could be as high as $50 million.
3. International: how much of the demand for the Model S is coming from overseas and countries like Norway? Construction is underway on the Tesla showroom at a popular mall in Beijing; when is that store slated to open?
4. Gross Margin: Tesla reported an 8 percent gross margin for the fourth quarter and reaffirmed that it expects to reach 25 percent gross margin by the end of this year. Investors are looking for gross margin improvement.
5. The Model X: In a recent tweet, CEO Elon Musk said Tesla’s priorities are the Model S, Model X, and then “mass market third gen vehicle & truck.” We haven’t heard any production details on the Model X, which combines the minivan with an SUV, in a while.