The never-ending soap opera surrounding Tesla (NASDAQ:TSLA) will come to another peak on Aug. 1, when the car maker is scheduled to release its second-quarter earnings report.

After all the setbacks the company has endured this year, this is not just one more financial statement — it could be a make-or-break moment for the whole enterprise.

Model 3 Production Is Up

The company keeps reminding the press that production of its Model 3 automobile is up substantially in the last 12 months. But maintaining this level of production has turned out to be a lot more expensive than company founder Elon Musk predicted, so the balance sheet shows a lot more red ink than it used to.

The production increase is genuine. The electric car pioneer produced almost 54,000 vehicles in the quarter — an increase of more than 50 percent compared to the previous quarter. About half of those cars were Model 3, the product on which the company has effectively bet its future.

Musk had promised that he could get the company’s factories producing 5,000 Model 3 units per week. Tesla did achieve that goal — during the very last week of the quarter. Analysts are already wondering how sustainable this level of production is.

Self-Driving Cars

In addition to leading the way in electric-powered vehicles, Tesla has also tried to be an innovator for driver-assist systems. Its Autopilot technology has been around for two years now, and the company has consistently built on the initial product with over-the-air software updates. Automatic steering, parking assistance and improved emergency braking are all part of the package.

But Tesla seems to be falling short of stated goals in this area as well. A year ago, Musk was saying that “full self-driving capability” was right around the corner. In recent months, the company has downplayed this goal in favor of focusing on overall vehicle production.

Cash Flow Problems

A company attempting to achieve major technological innovation needs a healthy cash flow to support research and development. In the first quarter, the company posted negative free cash flow of about $1 billion, and nothing that has happened in recent months has caused analysts to think the next report will show a big improvement.

Any attempt to raise a lot of new capital could be hindered by the negative publicity the company has received in 2018.

Bottom Line on Elon Musk and Tesla Stock

Which brings us to Elon Musk himself. He has the reputation of a dynamic and charismatic entrepreneur, but he has also needlessly gotten involved in controversial matters. Remember when he suggested using a submarine to rescue the Thai soccer players who were trapped in a cave and then tweeted a slanderous accusation about a rescuer who questioned the efficacy of his plan?

This is just the latest flap that has led many investors to see Musk as a loose cannon who, in the age of swift Twitter reactions, could sink his whole company by shooting off his mouth.

Tesla has certainly achieved a great deal in its short life. But given the unpredictability of the firm’s balance sheet and of Musk himself, it remains an extremely risky investment.

As of this writing, Thomas Scarlett did not hold a position in any of the aforementioned securities.