Tesla delivered fewer vehicles than analysts expected last quarter, missing estimates despite taking the unusual step of offering hefty incentives in its two biggest markets.
The company handed over 405,278 vehicles to customers in the last three months, short of the 420,760 average estimate compiled by Bloomberg. While the total was a quarterly record for Tesla, the company opened two new assembly plants last year and still came up short of its goal to expand deliveries by 50 per cent.
After chief executive Elon Musk predicted an “epic end to the year”, Tesla proceeded to cut vehicle prices and production in China, then offered $7,500 (€7,089) discounts in the US.
Concerns about rising interest rates, inflation and other economic headwinds — plus alarm over Musk’s antics on Twitter, which he now owns — sent Tesla shares plunging 37 per cent in December and 65 per cent last year.
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“We believe that Tesla is facing a significant demand problem, Toni Sacconaghi, a Bernstein analyst with the equivalent of a sell rating on the stock, wrote in a report Monday. “We believe Tesla will need to either reduce its growth targets (and run its factories below capacity) or sustain and potentially increase recent price cuts globally, pressuring margins.
Tesla increased deliveries by 40 per cent to 1.31 million last year, shy of the 50 per cent average annual growth rate the company has said it expects to achieve over multiple years. Production expanded 47 per cent to 1.37 million.
The company produced 439,701 vehicles in the fourth quarter, exceeding deliveries by 34,423 units. Tesla said that it continued to transition to “a more even regional mix of vehicle builds, which led to another increase in cars in transit at the end of the quarter.
“Tesla sells cars, and the auto industry is slowing down,” said Gene Munster, managing partner of Loup Ventures, by phone. “They are still struggling with logistics, and the gap between production and deliveries grew from the last quarter.”
A look ahead to 2023
Tesla’s quarterly delivery figures are widely seen as a barometer for EV demand generally since the Austin, Texas-based company has led the charge for battery-powered cars.
The company has a long tradition of going all-out at the end of each quarter to get cars into the hands of customers, with top executives like design chief Franz von Holzhausen helping out at a southern California delivery centre on New Year’s Eve.
Tesla doesn’t break out sales by region, but the US and China are its largest markets, and 95 per cent of sales in 2022 were of the Model 3 sedan and Y crossover.
The company makes the Model S, X, 3 and Y at its factory in Fremont, California. Its Shanghai plant produces the Model 3 and Y, and it started delivering Model Ys from its newest plants in Austin and near Berlin in the first half of last year.
While Musk handed over Tesla’s first Semi trucks to PepsiCo in December, the company didn’t report any deliveries of the model in its quarterly statement.
The carmaker announced separately that it’s scheduled an investor day for March 1st, where it will discuss long-term expansion plans, a next-generation vehicle platform, capital allocation and other subjects. — Bloomberg
