At Tesla (NASDAQ: TSLA) some important narratives take place. Although the production of Model 3 has skyrocketed, the company's net loss and negative free cash flow have deteriorated significantly. Sure, management expects Tesla's financial position to improve as Model 3 shipments increase, but there are no guarantees.
It is not surprising that big questions arise. Investors will receive some important answers in an important quarterly update. The electric car and sustainable energy company has released a second quarter update: 1 August.
Tesla's second quarter update follows three key questions investors are likely to hope Tesla boss Elon Musk will answer:
. What does the production of Model 3 look like?
Investors do not have to wait until Tesla's second quarter update to see how Model 3's production and deliveries over that period ended. The company has already published these figures. Tesla produced a record of 53,339 vehicles – 55% sequentially. Of these vehicles, 28,578 were model 3. However, since Tesla's Model 3 increased exponentially throughout the quarter, most vehicles were produced toward the end of the period, with 11,166 Model 3 en route to customers entering the third quarter.  Tesla has achieved its goal of producing 5,000 Model 3 units per week by the end of the quarter – but it has achieved it in the last seven days of the quarter, so investors are guessing how sustainable this new level of production is. Tesla has at least alleviated some concerns and found that it could achieve this production rate of Model 3, while the production of Model S and X remained normal.
The big question therefore is how the production of Model 3 since Tesla progresses its target 3 production rate. Is Tesla able to sustain this higher level of production? Is Tesla still expecting a production rate of 6,000 Model 3 units per week by the end of August?
. 2 What's next for autopilot?
After Tesla's driver assistance system was first released in October 2015, the company upgraded the technology through regular over-the-air software updates that brought important new updates, including driver assistance, lane change, the ability to park the vehicle in confined spaces, and tight spaces To "swear" out rooms and improved automatic emergency braking.
But Tesla's autopilot program seems to be in default recently. For example, Musk initially promised to have one of its vehicles drive through the country by the end of 2017, proving that Autopilots' add-on 'Full Self-Driving Capability' is the only thing to be released. But autopilot seems to take a backseat while Tesla focuses on the accelerated production of Model 3.
Now that the production of Model 3 has jumped, the automaker is devoting more to the autopilot
. 3 Will Tesla still have to raise capital this year?
Tesla's financial situation does not look good. The company ended its first quarter with cash of $ 2.7 billion. Nonetheless, management plans to spend $ 2.3 billion more in Q2, Q3 and Q4, even though it had a negative free cash flow of $ 1.05 billion in the first quarter. To make matters worse, Tesla did not anticipate a positive cash flow until the third quarter – which means that Q2 will probably also have a negative free cash flow.
Management predicted that it would not require a capital increase year since it expected higher Model 3 deliveries to help the company become both profitable and cash flow positive in the second half of the year. Will the management stick to this plan? Or is the capital-intensive auto business more expensive than the management expects?