Tesla Inc (Nasdaq: TSLA) revealed record production and cumulative deliveries of electric vehicles in its fourth quarter but failed to meet Wall Street estimates. The autonomous vehicle manufacturer’s lower-than-anticipated performance was due to logistics issues, declining demand, increasing interest rates, and global economic uncertainty. The share price of Tesla crashed 12.24%, or $15.08, to close at $108.10.
Specifically, Tesla delivered 405,278 vehicles in the final quarter of 2022 versus analysts’ estimates of 431,117 vehicles, as per the data provided by Refinitiv. Notably, the world’s most valuable electric car manufacturer reported the delivery of 308,600 vehicles in the fourth quarter of 2021.
Version-wise, Tesla delivered 388,131 units of Model Y SUVs (sports utility vehicles) and Model 3 compact sedans compared with 17,147 Model X and Model S top-end cars. Overall, Tesla manufactured 439,701 cars in the final quarter of 2022.
With continuing logistics issues, in October 2022, Tesla’s CEO, Elon Musk, stated that he was implementing the necessary strategy to clear the supply chain problems. However, Tesla’s deliveries in the recent quarter were 34,000 units lower than production. In the previous quarter (Q3 2022), the company reported deliveries that were roughly 22,000 units lower than production.
It is unusual for Tesla to deliver lesser automobiles than it produces; in prior quarters, it delivered a greater or comparable number of electric vehicles.
Another issue faced by the company is the sluggish demand in China, which is the world’s largest auto market. Tesla also faces heavy competition from traditional large auto manufacturers such as General Motors (GM.N) and Ford Motor Co (F.N). Additionally, the market is also witnessing the arrival of promising startups such as Lucid Group (LCID.O) and Rivian Automotive (RIVN.O).
The company has decided to slash production for the foreseeable future. In this regard, Tesla has downwardly revised its production schedule for its Shanghai factory.
The share price of Tesla has eroded by 65% over the last year, reflecting the worst performance since getting listed in 2010. Investors and analysts are worried that global uncertainty would put pressure on the company’s aim to increase its deliveries by 50% yearly.
Last year, the company delivered 1.31 million vehicles, reflecting a delivery growth rate of 40%. However, Tesla missed the annual delivery growth rate target of 50%. The company manufactured 1.37 million vehicles, reflecting a y-o-y increase of 47%.
Commenting on the deliveries, Daniel Ives, an analyst at Wedbush Securities, opined that the numbers were disappointing and that Tesla stock advocates were not thrilled.
In separate news, Tesla has announced that it has scheduled Investor Day celebrations for March 1. Furthermore, the event will be telecast live from its Texas-based Gigafactory. The company intends to reveal its long-term strategy for capital allocation and expansion on that day.
During its Investor Day, Tesla provided a hint that it will showcase a “generation 3” system. In October, CEO Elon Musk mentioned that the company was developing a “next-generation vehicle,” which is expected to be more affordable and compact compared to the Model 3 and Model Y models.
The lower-than-anticipated deliveries and downward amendment of the production output plan are expected to keep the stock of Tesla range bound in the short term.
Technically, the stock of Tesla is declining after facing a big sell-off at 200 levels. The next major support is anticipated only near 100. Additionally, the stock is trading below its 50-day moving average, while the Chaikin money flow indicator is showing a negative reading. Therefore, we anticipate the share price of Tesla to remain in a downtrend in the days ahead.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
