After months of "production hell," then a period of mayhem involving Elon Musk, Tesla Inc. may finally be entering a new era -- one in which it makes money.
The electric-car maker is approaching its earnings report today with much of Wall Street suddenly gushing with enthusiasm about its prospects. Musk, who's said he's comfortable predicting that Tesla will post profit and positive cash flow every quarter going forward, excited investors by hastily scheduling the release of results earlier than expected and with just two days' notice.
Tesla shares surged 13 percent Tuesday, on speculation that Musk was in a hurry to share good news. The stock also got a bump from Citron Research's Andrew Left -- a vocal, long-term critic who had been shorting the shares -- announcing that he had changed his view. He's now long on the company, saying it's hitting stride with Model 3 production and snagging customers from the likes of Mercedes and BMW.
"When he says they're going to be cash-flow positive, possibly this quarter, I'm not going to doubt it," Left said of Musk on Tuesday in a Bloomberg Television interview.
When Musk was busy making "a sideshow of himself" in recent months, Left said he and others overlooked an underlying business that's turned a corner. The Tesla CEO failed in his short-lived bid to take the company private, and agreed in a settlement with the Securities and Exchange Commission to relinquish the role of chairman.
Tesla delivered 83,500 vehicles in the third quarter -- many of them higher-priced models -- and scores of existing Tesla owners volunteered at delivery centers in the final weekend. In an email to employees on Sept. 30, Musk said the company was "very close to achieving profitability and proving the naysayers wrong."
Some bears are now conceding that this rare feat for Tesla may indeed have been achieved.
"We fully expect that Tesla has found a way to show a profit for the third quarter and would be very surprised if they don't, given the hoops they jumped through to do so," David Kudla, chief investment strategist for Mainstay Capital Management, who's bet against the company, said in a note Tuesday. "Tesla must go back to the capital markets for money, but maybe they want to get a profitable quarter on the books first."
Here's what to watch for from Tesla's report:
ZEV credits
If Tesla turns a profit, it'll be only its third on a quarterly basis since 2013. One factor that could help the company get over the hump this quarter is the sale of the zero-emission vehicle credits to other automakers, which need them to meet mandates in states led by California. ZEV-credit sales can be lumpy -- Tesla reported $50 million of them in the first quarter, but none in the second quarter. Analysts are on the lookout for whether the company pulled this lever to boost revenue.
Customer deposits
Tesla takes refundable deposits from customers before their cars -- or solar roofs -- are in production. At the end of June, deposits stood at $942.1 million. With more Model 3 sedans now being delivered, it's not clear how many reservations have been converted to actual sales, and how much more pent-up demand is still left for the company to work through.
Seeking guidance
Last quarter, Tesla gave a forecast for how many Model 3s it would produce in the next three months and said deliveries would exceed that total. The company hasn't yet said whether it achieved a goal to make 6,000 of the sedans a week by late August and has been vague about when it'll get to a 10,000-a-week rate. Musk has walked back previous plans to get there by sometime this year.
The board
As part of his and Tesla's settlement agreements with the SEC related to his go-private tweets, Musk must step down as chairman by mid-November, and the company must appoint two new independent directors to the board by late December. So far, Tesla has been mum on the status of the search process.