Investor's Corner
Tesla’s Q3 2018 earnings call: What we expect to see
In a rather surprising announcement on Monday, Tesla revealed that it was releasing its Q3 2018 earnings report after the closing bell on Wednesday. The earlier-than-expected earnings call appears to have fostered positive sentiments among the company’s investors, and coupled with a change of heart from a staunch TSLA short-seller, Tesla stock (NASDAQ:TSLA) saw a 12.72% rise on Tuesday, bringing the company within reach of the $300-per-share-mark once more.
While Tesla was able to hit its production and delivery targets in Q3, questions remain about whether the company was able to turn a profit as promised by CEO Elon Musk. That said, Wall Street analysts polled by FactSet expect Tesla to post revenue of $6.05 billion and a GAAP EPS of -$0.95, partly due to a major increase in Model 3 deliveries in the third quarter. Non-GAAP EPS consensus is a more favorable -$0.03.
With these in mind, here are some pertinent updates and information we are expecting to see in Tesla’s Q3 2018 earnings call.
Profitability and Cash-Flow Updates
Earlier this year, Elon Musk boldly declared that Tesla would be profitable and cash-flow positive in the second half of the year. The company went through great lengths in its efforts to achieve this ambitious target, from laying off 9% of its employees last June to allowing owners to help out the company deliver as many vehicles as possible in the final weeks of the third quarter.
Wall Street analysts polled by FactSet expect the company to report a modest amount of positive free cash flow for the third and fourth quarter. Non-GAAP EPS is also expected to improve to $0.78 in Q4. In the upcoming earnings call, Tesla would likely offer some updates on its profit outlook in its shareholder letter.
Model 3 Production and Margins
In Tesla’s Q2 shareholder letter, the company stated that it is aiming to grow Model 3 production to 10,000 units per week as soon as it can. Tesla also aimed to produce the Model 3 at a rate of 6,000 per week by late August — a goal that the company was unable to attain. In today’s earnings call, Tesla is expected to provide an updated guidance for the Model 3 ramp.
Back in August, Tesla noted that it expects Model 3 gross margins (GM) to improve to 15% and 20% in Q4. These figures are a bit more conservative than Tesla’s initial forecasts for the vehicle, which estimated gross margins to be at 25% when production is stabilized at 5,000 units per week. The upcoming earnings call should provide some guidance as to where the Model 3’s gross margins are at this point, and where it could be at the end of Q4.
The $35,000 base Model 3 and the Model Y
Tesla has pretty much hit its stride with the production of the Long Range RWD, Dual Motor AWD, and Dual Motor Performance Model 3. Earlier this month, the company also revealed the Mid Range RWD Model 3, a vehicle that places the electric car’s price closer to Elon Musk’s $35,000 starting price for the electric sedan. Considering that the company has left its self-imposed production hell, the time might be right for Tesla to provide some updated guidance as to when the long-promised $35,000 Model 3 would enter production.
Updates on other upcoming vehicles are also expected, particularly the next car in the company’s lineup — the Model Y. Considering that Elon Musk has teased an unveiling sometime early next year for the crossover SUV, there is a good chance that the upcoming Q3 2018 earnings call would provide a more concrete date for the highly-anticipated vehicle’s unveiling.
Tesla Energy Updates
Tesla Energy does not attract as many headlines as the company’s electric car business. Despite this, the company’s executives including CEO Elon Musk and CTO JB Straubel have both noted that Tesla’s energy storage business would likely match the company’s electric car division in the near future. This was highlighted recently by legendary investor Ron Baron, who stated that Tesla could become a $1 trillion company by 2030, comprised of a $500 billion electric car division and a $500 billion battery storage business.
Wall Street analysts’ consensus for Tesla Energy estimates the business to post revenue of $377 million (up 19%), and a gross profit of just $20 million. Announcements on upcoming battery storage projects are also expected to be discussed in the upcoming call.
Tesla’s New Chairman
As part of his settlement with the Securities and Exchange Commission, Elon Musk agreed to step down as Tesla’s Chairman. Reports eventually emerged that board member James Murdoch was in line to take on Musk’s role. These reports were eventually debunked by Elon Musk himself on Twitter, though, leaving Tesla’s next chairman still a large question mark.
On Wednesday’s earnings call, expectations are high that the company would provide some updates on its search for a new Chairman to replace Elon Musk. Other terms of the CEO’s settlement with the SEC, particularly the addition of two new independent board members, would likely be discussed as well.
Tesla’s Q3 Update letter would be posted on Tesla’s Investor Relations website after markets close today. At 3:30 pm Pacific Time (6:30 pm Eastern Time), Tesla would start its Q3 earnings call.
Electric vehicle maker Lucid Group has denied rumors of an imminent bankruptcy after a report from this morning sent the stock on a dramatic drop on Wall Street, seeing losses of more than 40 percent during trading hours.
Lucid’s Director of Communications, Nick Twork, responded to the report from Eletric-Vehicles.com, which stated the company’s restructuring advisor, AlixPartners, was asked to review two decisions: taking Lucid shares private or filing for Chapter 11 bankruptcy protection.
The report also claims AlixPartners told the Lucid board to “concentrate on Gravity production while improving its quality, and to temporarily hold back the Lucid Air, the sedan that has defined the company since its launch.”
Twork said:
$LCID The rumors are completely false. The company has sufficient liquidity to carry its operations well into next year, as recently published in its last quarterly filings, and it has not formed any special Board committee to explore the scenarios reported today. Our focus is…
— Nick Twork (@ntwork) July 14, 2026
Shares rebounded after the response to the report, halving its losses as the trading day neared 3 p.m. Eastern.
Lucid has struggled to get its sales off the ground and into more respectable numbers, but the company is in its early years, when things are hard to begin with. It is also backed by several notable investors, including the Saudi Public Investment Fund (PIF), which has nearly limitless money and likely would not ditch an investment of this size so soon.
Lucid shares were down just 14 percent at the time of publication, a far cry from the 55 percent its losses topped out at during the day.
Tesla received a price target upgrade just on the heels of what was a crazy successful quarter for its automotive business, as the company reported a delivery beat of over 15 percent for Q2.
Jefferies analysts are upping Tesla’s price target (NASDAQ: TSLA) to $400 from $375, while maintaining their “Hold” rating on shares, and the strong automotive deliveries from Q2 is a big reason. However, there are some other catalysts that Jefferies believes position Tesla for a strong position in the second half of the year.
Strong Deliveries
Tesla reported 480,000 deliveries for Q2, while Wall Street was between 395,000 and 405,000, as an overall consensus. It was an incredibly strong quarter from a delivery perspective, and Tesla sold well more than it produced during the three months.
Tesla crushes Wall Street expectations, beats delivery estimates by over 15 percent
While vehicle deliveries are not necessarily looked at in the light that they used to be, Tesla still maintains a lot of advantages for keeping deliveries strong. With the loss of the $7,500 EV Tax Credit last year, Tesla still maintains a strong demand case for its EVs.
Robotaxi Performance
Tesla has been operating Robotaxi for over a year now, as it launched in Austin in mid-2025. That program has expanded to Houston and Dallas, the San Francisco Bay Area, and, most recently, Miami, Florida, the suite’s first appearance in the Sunshine State.
While the Robotaxi suite is still in its early phases and Tesla is working through things like fleet size and wait times, the company has been able to undercut the pricing of its competitors and has a great safety record.
Merger Speculation with Tesla and SpaceX
This is perhaps the biggest topic that many are speaking about with Tesla and SpaceX, and it is the one thing that seems to be on the mind of every investor.
Jefferies warns that growing talk of a Tesla-SpaceX merger could cause Tesla stock to trade more like a SpaceX proxy, which may disconnect it from underlying automotive fundamentals. SpaceX has a lot going for it, especially its compute deals that have been widely publicized as of late.
Profitability in New Projects Could Take Some Time
Tesla has a few long-term ventures in the pipeline, most notably the Optimus project and Robotaxi, which is launched but will take several years to expand to a meaningful level that resonates with everyday people.
This is something that investors need to be careful of. Tesla’s projects could take some time to round out, so Jefferies advises that these may carry initial losses, rather than immediate profit. Seasoned Tesla investors have echoed something like this for a long time; they knew going in it would not be an open-and-shut strategy. It was going to take time.
These new projects are no different.
Investor's Corner
NASA taps SpaceX to launch the telescope that could unlock new worlds
NASA’s Roman Space Telescope heads to orbit this August aboard SpaceX’s Falcon Heavy with massive scientific ambitions.
SpaceX is set to play a central role in one of NASA’s most anticipated science missions in years. The company’s Falcon Heavy rocket, currently the most powerful operational launch vehicle in the world, will carry the Nancy Grace Roman Space Telescope into orbit on August 30 from Kennedy Space Center in Florida. Roman is now in final preparations inside the Payload Hazardous Servicing Facility, where on June 26 technicians used a crane to lift the observatory into a specialized stand for fueling and pre-launch testing.
Roman is named after Nancy Grace Roman, NASA’s first chief of astronomy, whose career helped shape how the agency approaches space science.
NASA chose SpaceX Falcon Heavy because of Roman’s needs to reach a specific orbit far from Earth, well beyond where a standard Falcon 9 can deliver it. The Falcon Heavy, which first flew in 2018, has since become NASA’s go-to option for missions that need serious muscle without the cost and complexity of older launch systems.
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Roman will carry a field of view at least 100 times wider than the Hubble Space Telescope, meaning it can photograph enormous swaths of the universe in a single shot rather than the narrow slices Hubble captures. That difference in scale is significant. While Hubble reshaped our understanding of the cosmos over 30 years, Roman is built to work faster and wider, surveying hundreds of millions of galaxies at once.
One of Roman’s most compelling capabilities is its potential to discover and photograph planets orbiting stars outside our solar system, and with enough precision to directly image planets that would otherwise be lost. That means scientists could study the atmosphere and surface characteristics of distant worlds rather than simply confirming they exist. Combined with Roman’s sweeping field of view, the telescope could detect thousands of exoplanets, and some of those planets may be in habitable zones where liquid water could exist. No telescope currently in operation has this level of power and capability. That capability alone could change what we know about other worlds, and perhaps finally answer the question: are we the only intelligent lifeforms in existence?
What Roman actually finds once it reaches orbit is an open question, and that is exactly what makes this launch worth watching.
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