3 Key Items to Watch When Tesla Motors, Inc. Reports Earnings This Week

By Markets Fool.com

If you're following electric-car maker Tesla Motors , mark your calendar for Wednesday, Feb. 11 -- the date the company will unveil its most recent quarterly results. Tesla goes to greater length than most publicly traded companies when it reports its quarterly financial results, including a lengthy quarterly letter to shareholders and a live question-and-answer session that usually lasts longer than an hour. The depth of information provides a plethora of valuable information for investors.

Continue Reading Below

Amid all the information Tesla will provide this week, these three topics may be some of the most important.

Source: Tesla Motors.

Model X launch
"[W]e now expect Model X deliveries to start in Q3 of 2015, a few months later than previously expected," Tesla said in its most recent quarterly letter to shareholders. This wasn't the first delay for Tesla's fully electric crossover with flashy "falcon wing" doors. Indeed, Tesla's initial time frame for the first Model X deliveries was early 2014. Since then, the X has been delayed several times.

Continue Reading Below

Model X prototype. Source: Tesla Motors.

Why the most recent delay? Tesla said in its Q3 letter that it "recently decided to build in significantly more validation testing time to achieve the best Model X possible." A positive side effect for investors is that "This will also allow for a more rapid production ramp compared to Model S in 2012," management wrote in the letter.

Tesla admits fault in being overly optimistic about some of its goals, but it warns investors not to expect this to be the last time the company misses a deadline.

This also is a legitimate criticism of Tesla -- we prefer to forgo revenue, rather than bring a product to market that does not delight customers. Doing so negatively affects the short term, but positively affects the long term. There are many other companies that do not follow this philosophy that may be a more attractive home for investor capital. Tesla is not going to change.

But if Tesla's practice of emphasizing the long term so strongly is as good in practice as the company suggests it is in theory, investors with longer time horizons may take comfort in the reasoning behind the delays. Conjuring up long-term value at the expense of short-term results is easier said than done, of course. Even worse, it's nearly impossible to predict.

Watch to see whether Tesla keeps its Model X launch timing for Q3.

Guidance for 2015 vehicle sales
In Tesla's third-quarter letter to shareholders, the company gave us a glimpse of what sort of unit sales it expects from Model S in 2015. But Tesla hasn't provided an official figure for full-year total vehicle sales guidance, which will include sales of its Model X.

As for the Model S, Tesla said it expects deliveries of the vehicle to increase by 50% in 2015. Since it's guiding for 33,000 deliveries in 2014, this forecast would put 2015 Model S deliveries at 49,500.

Watch for Tesla's guidance for total vehicle sales in 2015, as well as expectations specifically for the Model X.

Gigafactory progress
Ignoring the Gigafactory would be turning a blind eye to the elephant in the room. Tesla's $5 billion under-construction factory in Nevada, aimed at bringing the economies of scale needed to make batteries to eventually support production and sales of 500,000 lower-cost fully electric vehicles per year by 2020, is hands down the most important catalyst for the company. While it may be years out, investors can't ignore its construction.

Rendering of planned Tesla Gigafactory. Source: Tesla Motors.

Tesla said in its Q3 letter to shareholders that the construction was ahead of schedule. Initially supposed to begin battery production in a 2016 to 2017 time frame, the company said it has now narrowed the time frame for first Gigafactory cell production to begin in 2016.

"Starting operations earlier will reduce ramp-up risks for Model 3 and provide some potential expansion capacity for Model S and Model X," Tesla said in the letter. While the comment may seem small, the implications of an early start -- if it really does pan out this way -- are huge.

Look for an update on the construction of Tesla's Gigafactory.

The article 3 Key Items to Watch When Tesla Motors, Inc. Reports Earnings This Week originally appeared on Fool.com.

Daniel Sparks owns shares of Tesla Motors. The Motley Fool recommends and owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.