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Several important accounts take place in Tesla (NASDAQ: TSLA) . Although the production of Model 3 has skyrocketed, the company's net loss and negative free cash flow have worsened considerably. Of course, management expects Tesla's financial situation to improve as model 3 shipments increase, but there is no guarantee.
Unsurprisingly, big questions arise. Investors are about to get key answers in an essential quarterly update. The electric car and sustainable energy company just put a date to its second quarter update: August 1st.
Model 3. Image Source: Tesla.
Before Tesla's second quarter update, here are three key questions investors are likely to hope Tesla's CEO, Elon Musk, will answer:
1. How is the production model 3
Investors do not have to wait for Tesla's update in the second quarter to find out how the production and deliveries of Model 3 took place during the period. The company has already released these figures. Tesla produced a record 53,339 vehicles – up 55% sequentially. Of these vehicles, 28,578 were of the Model 3. But as Tesla Model 3 production increased exponentially throughout the quarter, most vehicles were produced towards the end of the period, leaving 11,166 model 3 in transit towards the third quarter. ] It is important to note that Tesla reached its target of producing 5,000 Model 3 units per week at the end of the quarter – but it reached it in the last seven days of the quarter, leaving investors guessing at what point this new level of production is sustainable. Attenuating at least some concerns, Tesla noted that she was able to achieve this model 3 production rate while retaining her production of S and X models.
The big question is therefore how Model 3 production has increased since Tesla reached its model 3 target production rate. Was Tesla able to maintain this higher level of production? In addition, does Tesla still expect to reach a production rate of 6,000 model units 3 per week by the end of August?
2. Next Steps in Autopilot
Following the release of the Tesla Driver Support System in October 2015, the company has significantly improved technology through regular software updates that have brought new updates. major. , the ability to "summon" the vehicle in and out of tight spaces, and improved automatic emergency braking.
But the Tesla autopilot program seems to be late on the schedule recently. For example, Musk initially promised to demonstrate one of his vehicles across the country by the end of 2017, proving that the Autopilot add-on "Full self-driving capability" is the real deal. But the autopilot seems to be lagging behind as Tesla focuses on accelerating the production of the Model 3.
Now that the production of Model 3 has jumped, will the automaker devote more money to 39, efforts to autopilot? "src =" https://g.foolcdn.com/editorial/images/488597/tesla-stock-q2-earnings-preview_large.jpeg "/>
Model 3. Image Source: Tesla.
3. Will Tesla need to raise capital this year after all?
Tesla's cash position does not look good. The Company closed its first quarter with $ 2.7 billion in cash, but management plans to spend an additional $ 2.3 billion in the second quarter, third quarter, and fourth quarter despite negative free cash flow in the first quarter. $ 1.05 billion in the first quarter. To make matters worse, Tesla said he did not expect a positive cash flow before the third quarter – this means that the second quarter will likely also include negative cash flow.
Management predicted that it would not need this year, it expected higher deliveries of Model 3 to help the company become both profitable and positive in the second half. Does the management stick to this plan? Or is the capital-intensive automobile business more expensive than management expected?
