Tesla Model 3 production, Elon Musk Q&A in earnings spotlight

Tesla is expected to book a wider second-quarter loss despite stronger revenue, as the company invests heavily in expanding production of the Model 3.

The electric car maker is working to put production delays in the rearview mirror and fill thousands of reservations for the Model 3. Tesla met a self-imposed target to build 5,000 Model 3 sedans per week by the end of June, and it planned to produce 6,000 units per week in late July. Investors will be looking for signs that Tesla can maintain that production rate.

Tesla also announced in early July that orders and deliveries of the Model S sedan and Model X crossover increased year-over-year in the second quarter.

Sales of the Model 3 are seen as key to Tesla’s future. The Model 3 is the company’s first mass-market vehicle with a starting price of around $35,000, though Tesla has only built more expensive versions so far.

The earnings report will be Tesla’s first since a tense conference call between CEO Elon Musk and Wall Street analysts. Musk cut off questions that he called “boring” and “dry,” which led to a drop in Tesla’s shares following the first-quarter earnings report. The executive later said it was “foolish” of him to ignore those questions.

Analysts are also closely watching Tesla’s earnings guidance. Musk has said Tesla will generate profits and positive cash flow in the third and fourth quarters, a target that Tesla affirmed in its second-quarter deliveries report.

Wall Street expects Tesla to report an adjusted loss of $2.81 per share, more than a $1.33-per-share loss recorded in the same period last year. Revenue is projected to hit $3.97 billion, which would reflect a sharp increase from $2.79 billion.