After delivering two consecutive quarterly earnings, Tesla is expected to fall back into the red for the first three months of the year. But the real question is just how deep the deficit will be when Tesla reveals the January-March numbers after the closing bell on Wall Street Wednesday afternoon.

What’s clear is that a number of traditional upbeat observers have begun to question Tesla’s short- to mid-term outlook. While Chief Executive Officer Elon Musk originally forecast another quarterly profit, it quickly became apparent the new year wasn’t going to start off on a positive note. Tesla reported earlier this month that it had delivered just 63,000 vehicles so far this year.

Making year-over-year comparisons can be tricky with Tesla. For the first half of 2018, the automaker was in what Musk called “production hell,” struggling to fix major problems at its Reno, Nevada, Gigafactory battery plant and its Fremont, California, assembly line. So, by comparison, sales of the Model 3 sedan were up 522.2 percent compared to the first quarter of 2018. But, far more tellingly, deliveries were off 19.4 percent compared to the final three months of last year.

The older Models S and X, meanwhile, were off by 44.5 percent compared to the first quarter of 2018, and down 56.1 percent compared to the last quarter of the year.

Declining demand for the Models S and X shouldn’t be much of a surprise, said Joe Phillippi, senior analyst with AutoTrends Consulting. “They’re getting old,” he said.

But the plunge in sales of the Model 3 is an entirely different matter. Tesla may be hitting the limits of demand among early adopters and now finding it more difficult to win over mainstream buyers who are more skeptical about the benefits of battery-electric vehicles. There’s also the company’s slow roll-out of lower-priced versions of the Model 3, with many potential customers holding off for the long-awaited $35,000 base version.

Efforts to expand sales abroad have proved troubling, especially in China. And Tesla won’t be ready to start running its new factory in Shanghai until late 2019, at the earliest.

But perhaps the biggest challenge appears to be the fact that Tesla pulled forward a significant number of sales during the final quarter of last year. Much of that was due to the fact that the automaker was going to see its federal tax credits cut in half on Jan. 1 after its total sales topped 200,000, the threshold set by Congress.

Through the end of June, buyers will now get just $3,750 in federal incentives — a figure that will be cut in half again come July 1, and then eliminated entirely as of Jan. 1, 2020. Tesla tried to offset the impact of the tax credit reduction by trimming its prices by $2,000 but still, sales didn’t come close to matching the sort of trend line Musk has been promising, having forecast an annualized rate of about 500,000 vehicles by the end of 2019.

The general consensus is that Tesla will go 99 cents per share into the red, according to FactSet. And that's significantly better than the $3.35 per share deficit the electric car maker reported a year ago. But Tesla needs to start generating more revenue. Its cash holdings have been stretched, not only by a payoff of $920 million in convertible senior notes that came due during the first quarter, but by the hefty cost of funding multiple product development programs. That includes not only the Model Y crossover that Musk says could yield double the sales volume of the Model 3, but also a new Roadster, Tesla’s first pickup, and a Class 8 Semi truck.

“Our suspicion is that Q1 EPS could be an outright disaster, given that Tesla guided for a loss with an entire month left in the quarter, and its inherently high degree of operating leverage,” said Garrett Nelson, an analyst with investment firm CFRA.

On the positive side, Tesla investors have already taken into account the potentially bad news the company could announce Wednesday evening. The stock hit a six-month peak of $376.79 on Dec. 13 and has closed as low as $260.42 since then. If Tesla manages to beat expectations with its earnings announcement it could actually see a market bounce, some analysts are predicting.

For his part, the ever optimistic Musk told analysts at an event at Tesla’s headquarters on Monday that owning anything but a Tesla over the next three years would be “financially insane.”

During the session, Musk revealed plans to make Tesla products capable of fully hands-free driving, and he offered more hints about products like the second-generation Roadster.

He also admitted he has “missed the mark before.”