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Here's what to expect from Tesla's Q3 earnings

Tesla is set to report its third-quarter earnings on Wednesday after the bell. Yahoo Finance’s Emily McCormick joins Akiko Fujita to discuss what investors should be expecting.

Video Transcript

AKIKO FUJITA: Let's shift our attention now to Tesla because we are seeing shares there down about 1.3%. This coming on the back or in anticipation of the big earnings report out from the company tomorrow. Emily McCormick is here with a preview. Emily.

EMILY MCCORMICK: Well, Akiko, taking a look at Tesla, of course, analysts and Wall Street and investors really focused on both the shorter term narrative for Tesla with regards to deliveries for the rest of 2020, and then that longer term narrative and especially in that strategy around batteries. So those will be the two main focuses in tomorrow's earnings results.

Now, taking a look at that near-term strategy, of course, Tesla earlier this year did put out that it expects to deliver around 500,000 vehicles for the full year. So far, the company has delivered about 319,000 for the year to date. That included record third quarter deliveries of 139,300.

So, still a ways to go here for the fourth quarter in terms of actually being able to hit that half million figure. But of course, a number of analysts have said that even if Tesla does come up a bit short for that 500,000 specifically, that longer term growth narrative really still is intact here for this stock.

Now, taking a look again at the battery strategy, remember that this third quarter report is coming just a couple weeks after Tesla held its inaugural Battery Day. At that event, the company announced plans to start manufacturing its tabless battery that could be used for its vehicles to start weaning it off some of its reliance on suppliers like Panasonic, some of these other chip makers.

And really, what this is going to do is eventually help the company bring the price of its electric vehicles down to $25,000, really making that a compelling value proposition for some car purchasers when it comes to buying an electric vehicle versus a typical combustion engine legacy auto.

So, a couple of things to watch here as well. Really just taking a look at this stock, up 400% so far for the year to date. It had delivered a fourth straight quarterly profit if we take a look at what had been reported over the summer. So again, pretty high expectations here, heading into these third quarter results. Akiko.

AKIKO FUJITA: OK, and I know you'll bring that to us as soon as we get them tomorrow. Thanks so much for that, Emily.