When electric-car maker Tesla Motors (NASDAQ:TSLA) reports first-quarter results Wednesday after market close, investors will be looking for evidence the company can continue to justify its forward-looking valuation. Metrics provided in Tesla's Q1 letter to shareholders will serve an important role in helping investors understand the company's current situation. But investors shouldn't overlook Tesla's quarterly conference call, scheduled to take place shortly after the earnings report's release, as another useful source of information.
Longtime Tesla investors know that some of the best gems in understanding Tesla's business are found during the company's quarterly conference calls. Skipping prepared remarks and jumping right into Q&A, Tesla CEO Elon Musk often spends over an hour fielding questions.
For investors planning to tune in to Tesla's live conference call, here are three key topics, along with some background information, likely to receive some attention.
Is demand for Model S ramping up in China?
Last year, worse-than-expected sales of Model S in China spooked Tesla investors. The company had expected the world's largest auto market to generate more demand than it did. Tesla has cited its own public relations missteps in the country, as well as artificial initial demand for Model S from scalpers, as reasons for the market's underperformance.
While Musk has noted on several occasions since it reported fourth-quarter results that it is making slow and steady progress in China since the company realigned its expectations and revamped its public-relations efforts in the country, he also said in March that Tesla still had excessive vehicle inventory in the market. Investors will want to hear more detail from Musk on the China market during the call.
To help drive demand in China, Tesla has rapidly been rolling out Supercharger locations. The company now has 58 Supercharger locations and hundreds of its Destination Charger locations in the market.
Is the Model X still scheduled for Q3?
In the last update from Tesla on the timeline for the first deliveries of its electric SUV, the Model X, the company said the first deliveries would begin in August -- the last month of Q3. With August just three months away, investors will be keenly interested in whether or not Tesla is going to stick to its timeline.
Investors have good reason to doubt the timeline for Model X. The vehicle's launch has been subject to multiple delays. Tesla began taking orders for Model X in 2013 and now has more than 20,000 deposit-backed orders for the vehicle.
Currently, Tesla has only shown off the details of its prototype Model X. But Musk says the production version won't disappoint, even outdoing the prototype. And during the last earnings call, he said there are "other things about the X that people don't know about yet."
Will Tesla deploy its "secret weapon"?
Key to Tesla's optimistic outlook for rapid vehicle sales growth is continually increasing demand. This is why Musk usually has to answer multiple questions related to demand during the company's earnings calls. This year, Tesla predicts Model S deliveries will increase 58% compared to 2014. Is demand for Tesla's $75,000-plus-priced sedan really this robust?
Musk said during the company's fourth-quarter earnings call that when Model S supply finally begins to catch up with demand, Tesla has "a secret weapon on the demand side that we'll probably start to deploy later this year for demand generation." Although he noted that the weapon wouldn't be "totally necessary," he said it "could be pretty interesting" and serve as a "good weapon against the dealers."
Is it time to deploy the weapon? Does it still exist? Is Musk still confident it will work?
For a closer look at some of the key metrics to watch when Tesla reports first-quarter results, take a look at this earnings preview.
Tesla's first-quarter letter to shareholders will be available to read shortly after market close on Wednesday here. The live conference call starts at 5:30 p.m. EDT. After earnings, check back at The Motley Fool for Foolish analysis.