Tesla is facing its 'most critical' test since launching the Model S (TSLA)

The company is facing an onslaught of bad news in recent weeks: a fatal crash and resulting investigation, a downgrade by Moody's, and a disappointing delivery report.
"We see the next three months as the most critical time in Tesla's history since the Model S launch six years ago," Morgan Stanley said in a note to clients Wednesday.

All eyes are on Tesla as it prepares to reveal its first-quarter earnings in a few weeks.

In the past month, the electric-car maker's stock price has whipsawed violently, declining by 16% since mid-March amid worries surrounding the company's need for more cash (though CEO Elon Musk maintains it will not need another round of infusion), a fatal Model X crash in California, a downgrade at Moody's, and Model 3 deliveries that fell short of expectations.

Now, the company is facing it's most critical test since it launched the Model S in 2012, according to Morgan Stanley.

"We see the next three months as the most critical time in Tesla's history since the Model S launch six years ago," analyst Adam Jonas said in a note to clients Wednesday. "The fundamental pendulum could move in either direction or in both directions in a big way, making Tesla the ultimate high-risk name in autos."

Musk has big goals for Model 3 production. In a letter Wednesday morning, he said Tesla could "unlock production capacity of 6,000 Model 3 vehicles per week by the end of June." Something Jonas says no investor Morgan Stanley has talked to believes to be possible.

By comparison, in it's most recent delivery update earlier this month, Tesla said it made 9,766 Model 3 cars in the first quarter, which translates to an average 751 vehicle per week.

When Tesla reports its first quarter earnings on May 2, Jonas says the need to raise cash will be at the forefront of investor's minds.

"Tesla may not "need" to raise funds, but many investors expect that the company will very much "want" to," he said. "For many quarters, we have modeled in a $2.5bn capital infusion from the issuance of equity in 3Q '18."

Morgan Stanley remains "equal-weight" on Tesla, with a price target of $376, 21% above where the stock was trading Wednesday. The Wall Street consensus is at $320.

Analysts polled by Bloomberg expect Tesla to report a loss of $3.35 per share on revenue of $3.345 billion early next month. Musk said earlier this month that the company will be profitable in 2018.

Tesla shares are down 7% since the beginning of 2018.

More from Tesla's ongoing struggles:

Tesla fires back after a scathing report alleges the company underreported injuries
This is the 'couch' Elon Musk sleeps on when he works late at Tesla, and the Internet is aghast
Tesla won't formally cooperate with the NTSB on fatal Autopilot crash investigation
Tesla might have just won a victory in China — but it will be expensive
Elon Musk reportedly tells Tesla employees that they should just leave meetings or hang up the phone if it's not productive