Tesla Earnings: Five Things to Listen For

(Bloomberg) --

Tesla reports first-quarter results after the market closes Wednesday. Yes, it’s on April 20, and “420” is both a marijuana reference and a key number in company lore.

Analysts surveyed by Bloomberg expect adjusted earnings of $2.27 a share and revenue of $17.92 billion. After the print, it’s the commentary during the earnings call that many investors pay close attention to.

Here are five things to listen for:

China

Everyone would like to hear Chief Executive Officer Elon Musk — or finance chief Zach Kirkhorn, if Musk isn’t on the call — talk about how much the Shanghai shutdown has crimped production, and how that impacts the outlook for the current quarter and rest of the year. A state media outlet in Shanghai reported Tuesday that about 8,000 workers have returned to Tesla’s Shanghai plant, which closed for about three weeks due to the Covid outbreak in the region. Tesla recently opened new factories near Berlin and Austin, Texas, but those will both take time to ramp up production, and China remains crucial to Tesla’s success.

Cybertruck

Scores of customers have put down refundable deposits for the Cybertruck. Musk told the crowd at his Cyber Rodeo in Texas last week that the truck is coming in 2023. Whether or not that happens, it’ll arrive later than the first electric trucks on the market. Rivian’s R1T went on sale in October, and Ford’s F-150 Lightning is coming later this month. This year is all about scaling new factories, but anticipation for the Cybertruck is high.

FSD

Tesla now has more than 100,000 drivers taking part in the beta-testing program for Full Self-Driving, a set of features that customers pay $12,000 for and are still required to actively supervise. Musk provided the new figure during an interview TED released on Sunday. With so many people now testing FSD, what will Tesla say — if anything — about recognizing deferred revenue? One analyst concluded after last quarter that the company may be losing faith in its ability to cash in anytime soon.

Mining

Musk tweeted earlier this month that prices of lithium, a major ingredient of electric-vehicle batteries, had reached “insane levels” and that Tesla “might actually have to get into the mining & refining directly at scale, unless costs improve.”

I read this as a warning shot to the mining industry: improve your costs, or we are coming for you. Tesla recently hired an exploration geologist from Rio Tinto, and the company has long preached the merits of vertical integration. A related question: Will Tesla acknowledge its nickel deal with Vale? Will Kirkhorn say anything about potential acquisitions?

Mobile Charger Uproar

Tesla no longer includes a mobile charging connector as a standard accessory with every car, a move many owners and fans have urged the company to reconsider. New customers who ordered vehicles after April 17 will have to pay $200 for a connector.

The company is now monetizing an accessory many people think of as essential, especially those without home charging and owners who frequently go on road trips to far-flung locations without a Tesla Supercharger in sight. Musk has cited low usage, but will we see more of these sorts of moves that are effectively shadow price hikes on top of more straightforward increases?

What else are you hoping to hear about during the call? Whether Musk is distracted by his interest in Twitter and might sell some of his Tesla shares to finance an acquisition? What about that stock split? Give me a shout: dhull12@bloomberg.net

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