Tesla to face the music

Tesla is rolling into first quarter earnings tomorrow, and what Elon Musk says about the future will in many ways be more important than the numbers it discloses for the past.

The big picture: Investors are eager for answers on several pressing questions:

• Is demand continuing to fall after the company reported its first quarterly sales decline in about two years earlier this month?
• Can the company sustain profitability after announcing more price cuts?
• Is Musk truly committed to delivering a next-gen affordable car dubbed the Model 2? And is his roadmap to self-driving cars realistic and profitable?

By the numbers: Entering this week, Tesla's stock was down about 41% in 2024, while the S&P 500 was up 5%.

State of play: The Tesla Cybertruck — which was never expected to sell in high volumes — is off to a fitful start anyway after the company recalled the vehicle to fix a faulty accelerator pedal.

• And even if the Model 2 remains on tap, it's not expected to arrive in meaningful volumes for another two years, leaving the automaker with few growth hopes from now until then.

The bottom line: Investors want to see a clear-eyed Musk at a time when his vision for the company is under intense scrutiny.

• "The clock has struck midnight for Musk to lay out the strategic plan for the future," Wedbush Securities analyst Dan Ives wrote in a research note, arguing that the company should prioritize the Model 2 over the robotaxi.