“Nothing is both real & imaginary,” Elon Musk, the CEO of Tesla, SpaceX and The Boring Company, tweeted last Sunday, the weekend before Tesla’s second-quarter earnings report.
Watch Tesla’s numbers — not Elon Musk’s mouth — when the company reports its latest results
Is Tesla succeeding in its transition to becoming a mass-market automaker? Elon Musk may have a lot to say, but the data will say more.
It was one of his tamer musings of late. But with several weeks of inflammatory tweets under his belt — ranging from confusing to downright bizarre — and after a weird first-quarter earnings call that sent Tesla’s stock plummeting, a lot of weight is being put on Musk’s behavior.
So when the electric carmaker reports its second-quarter results at 2:30 pm PT on Wednesday, people will want to hear what Musk will say: Will he mock analysts again for their “boring, bonehead” questions? But to be clear, Tesla’s numbers — not its CEO’s antics — will be more important to its future.
How Tesla’s self-imposed Model 3 targets shifted
March 2016: Tesla unveiled its first mass-market car, starting at $35,000.
July 2017: Tesla began by delivering a more expensive version of the Model 3. Musk said he expected to produce 5,000 Model 3s per week by the end of 2017.
November 2017: Musk shifted that goal to the end of the first quarter of 2018.
February 2018: Musk said he expected to produce 2,500 Model 3s per week by the end of the first quarter and 5,000 per week by the end of the second quarter. The timeline for delivery of the standard, affordable vehicle shifted from the fall of 2018 to early 2019.
May 2018: Tesla fell short of its projected first-quarter production rate of 2,500 cars per week. Musk said he expects to produce 3,000 to 4,000 per week this month and 5,000 per week by July.
June 2018: Tesla produced more than 5,000 Model 3s.
It’s a critical time as Tesla attempts to ramp up from a luxury automaker to a mass market one while also becoming profitable. So the most important numbers to watch include its production rate, revenue, losses and cash position.
On average, analysts expect Tesla to report whether it is shipping more than 5,000 Model 3 units per week. And that it will report a loss of $2.81 per share on $3.97 billion in revenue for the quarter.
Musk claimed Tesla is now a “real car company” after it finally met a deadline at the end of June — which had been pushed back several times — to produce 5,000 Model 3s a week. But achieving that goal required Tesla to prop up a makeshift assembly line in a tent outside its factory. It has also focused on shipping more expensive, lucrative versions of the Model 3; it had yet to begin shipping any of its base-level versions that were supposed to start at $35,000.
While that was a crucial mile marker for Tesla, the true test of whether Tesla is a “real” car company will soon be how financially and logistically sustainable that production rate becomes.
Still, the company says it will be able to produce 6,000 Model 3s a week by the end of August without raising additional cash.
Musk continues to expect to reach profitability — measured by so-called generally accepted accounting principles, or GAAP — in the third and fourth quarters of 2018. To that end, in an unusual move, Tesla asked for a refund from some of its suppliers, the Wall Street Journal reported.
Building a mass-market vehicle has been a long-held goal for Musk, and it’s a significant barometer by which investors and the industry are measuring Tesla’s capability as an automaker.
The ongoing journey to becoming a carmaker for the masses and a profitable one has not been easy. And despite Musk’s desire to avoid raising more cash, many analysts think the company will eventually need to.
Meanwhile, Musk has celebrated moments that — by the numbers — often look bleak. For instance, the company posted a record-high loss of $710 million on $3.4 billion in revenue in the first quarter of 2018. But Musk took a victory lap anyway because the company beat Wall Street’s expectations.
This article originally appeared on Recode.net.
