Tesla Inc (NASDAQ:TSLA) simply isn’t a very easy stock to value. Tesla stock predictions are based on estimates of what will happen in 2023 — and 2033. And the potential outcomes are vastly divergent. Bulls believe CEO Elon Musk and his company will lead an energy revolution. TSLA bears see a company headed for bankruptcy — maybe quickly.

And so I’ve long argued that investors need to stay humble when it comes to Tesla stock. Long-term, no investor truly knows how the Tesla story will play out. In the short-term, that means trading in TSLA comes down to confidence. And what’s been clear over the past few months, as I argued back in November, is that the market is losing confidence in Tesla.

Tesla’s first-quarter production update released on Tuesday has assuaged that problem — momentarily. Model 3 production hit 2,020 vehicles in the last week, below the company’s 2,500 target. But with Tesla stock already down 24% in just the last month, the production numbers were enough to drive TSLA shares up almost 4% as of this writing. Tesla needs to prove a lot more, however, to drive anything more than a relief bounce.

Tesla’s Production Numbers

There’s little doubt Tesla stock is benefiting from low expectations. It had become increasingly clear that Tesla would miss its 2,500 per week target — which itself had been pulled down from more optimistic figures cited in the past. Reports of flawed parts and a shift of workers from Model S and X production to the Model 3, among other news, all led to the conclusion that Tesla was racing to get, or at least near, the 2,500 level.

And so the 2,020 figure represents yet another figure that both bulls and bears will see as supporting their respective Tesla stock predictions. Bulls see it as a step in the right direction — and so does Tesla itself. The company said in its update that it now is targeting production of 5,000 per week by the end of Q2 (roughly), which would set up positive operating cash flow in Q3.

That in turn negates the need for another equity raise — which would dilute existing shareholders — or another debt issuance, which could be difficult or at least more expensive given plunging prices on Tesla bonds.

To bears, however, the 2,020 figure is yet another addition to the long list of broken promises I detailed last year. It wasn’t reached through “normal” production processes — but, rather, by a quarter-end rush to move production higher, simply to have something to show the market. Q3 projections can’t be trusted any more than the Q2 projections could be. And with the company publicly committing itself to not raising more capital in 2018, it sets Tesla stock up for a big fall if management once again has to go back on its word.

In short, the Q2 update provides a modest amount of good news for Tesla. But it’s not close to good enough for Tesla stock to rebound.

Tesla Stock Going Forward

From here, TSLA still doesn’t look like it’s worth the risk. Reading the tea leaves, the Q2 update hardly seems all that bullish.

At the beginning of the release, Tesla made an odd claim. It noted that Model 3 production had increased “exponentially” relative to the previous quarter.

“This is the fastest growth of any automotive company in the modern era,” the release stated, noting that the same path would exceed that of Ford Motor Company (NYSE:F) and the Model T.

In a quarter where so much supposedly was achieved, why is Tesla talking up something that’s not an achievement? There have been no automotive companies of size developed at all in the “modern era”. And is it really impressive that Tesla is outperforming a vehicle first produced 110 years ago?

Meanwhile, Tesla insisted that production quality was excellent in the quarter, despite a number of reports to the contrary. It all adds to the sense that Tesla is trying to paper over very real problems.

Production is not at 2,000 per week under normal conditions. The Model 3 does not sell for $35,000 — at least not yet. Tesla remains well behind its long-term targets. And as Bloomberg pointed out on Tuesday, Tesla’s production still remains far below that of established peers like Ford, General Motors Company (NYSE:GM), Honda Motor Co Ltd (ADR) (NYSE:HMC) and Toyota Motor Corp (ADR) (NYSE:TM).

The numbers simply aren’t good enough. And Tesla’s promises toward Q2 and Q3, given history, have to be seen as likely to be broken again. For years, investors ignored those broken promises. Now, they’ve lost confidence — and are keeping score.

If that continues, Tesla stock very likely will take more hits as 2018 rolls on.

As of this writing, Vince Martin has no positions in any securities mentioned.