Here’s our Tesla earnings primer for tomorrow’s results. Find our TSLA model here.

High Level Thoughts. 

• We believe the TSLA story has the most upside in large cap tech over the next 5 years.
• The company released Sep-17 delivery numbers on Oct 2nd, below plan for Model 3. They reiterated their goal of exiting Dec-17 quarter producing 5k Model 3’s per week, and 10k at some point in 2018.
• There is no cannibalization yet of Model X and S from Model 3. A second part of  the October announcement was strong demand for Model X and S, which is trending inline with Street expectations of ~100k Model S and X units for 2017.
• One downside of Sep-17 results; production outlook chips away at investor confidence in the Model 3 ramp over the next year.
• China is an emerging opportunity, with the government’s EV goals.

Model 3 Production. 

• Tesla last updated Model 3 net reservations on Aug 2nd, when they stood at 455K.
• For Dec-17 quarter, we’re expecting 5.6k Model 3 deliveries (Street at ~7k).
• For 2018, we believe the Street expects Model 3 production of 150-175K vehicles.
• While we believe Model 3 production will largely be a guessing game over the next few quarters, and will produce future disappointments, it’s important to note by now we believe Tesla has close to 475-500k net reservations for the Model 3, and we remain confident that Model 3’s value will stoke demand for the next several years.

Upcoming Questions:

• How realistic is the Model 3 ramp?
• Model S & X are not being cannibalized by Model 3 today. Do they expect that to change once Model 3 gets on the road?
• Timing on profitability?
• Timing on autonomy?
• Will Tesla build a China factory given the relaxed China JV requirements?
• Competition from Chinese brands will be an emerging topic with investors, given China’s goal for EV ultimately accounting for 11% of cars in 2019 and 12% in 2020.
• In China, will some car OEMs have to buy credits from EV sellers like Tesla, if it builds a factory in China?

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.