After the market close on Wednesday Aug. 5, electric-car maker Tesla Motors (NASDAQ:TSLA) will report second-quarter results. While investors will undoubtedly focus on popular metrics found in the company's annual shareholder letters, such as revenue and EPS, some of the most interesting commentary will probably surface during the conference call following the release. Known for spending more than twice as long as most other CEOs fielding questions during earnings calls, Tesla CEO Elon Musk will probably cover a wide range of important topics.
Here are some of the topics to listen for, as well as some relevant background information.
While Tesla did say shortly after it launched Tesla Energy in April that it had registered about 38,000 reservations for its smaller consumer-aimed Powerwall and 2,500 reservations for its large-scale Powerpack, investors are probably keen to get a more specific and recent update on the business Wednesday.
During the Tesla Energy launch event, Musk said it will begin sales of its Powerwall and Powerpacks this year, but he warned that the ramp-up in production will be slow. Next year, however, Musk said the ramp-up will be "much, much higher."
Is Tesla's energy storage business on track with the initial timeline Tesla laid out?
Model S demand
Barring China, Tesla has remained production constrained in its markets. But as the company's production continues to soar about 50% year over year every quarter, investors will be wondering whether demand continues to outstrip supply.
In its fourth-quarter letter to shareholders, Tesla said it entered the year with "over 10,000 orders for Model S." Since then, the company hasn't given a specific number for orders but has continued to insist demand is not a problem.
The carmaker's decision to launch a $2,000 referral program last month could suggest that demand growth for Model S is tapering off.
With the first deliveries of Tesla's Model X, its fully electric premium SUV, due in less than two months, analysts will probably ask Musk during the call about potential cannibalization of Model S sales.
While some cannibalization of Model S sales is inevitable, investors are hoping current quarterly volume of Model S sales can remain mostly uninhibited, or even continue to grow. At 95% of the company's revenue, and boasting gross profit margins above 25%, new Model S sales are crucial to the company's business.
Musk said in Tesla's third-quarter letter to shareholders last year that he expected Model S sales to grow 50% in 2015 "and probably for several years to follow." So far, Musk has been right. Year-over-year Model S sales growth exceeded 50% in both Q1 and Q2. But with a Model X launch around the corner, will the CEO maintain his bullish outlook for the line?