- Q4 deliveries miss expectations of 418,000 to 427,000
- Analyst calls performance ‘relatively good’ in tough market
- Tesla shares have doubled from pre-pandemic levels
Electric-vehicle maker Tesla (TSLA:NASDAQ) reported fourth quarter and 2022 full year deliveries overnight, and there was good and bad news.
Q4 2022 deliveries came in at 405,278 vehicles, up 40% year-on-year and the first time it has ever handed over more than 400,000 units to customers in a single quarter. Yet deliveries still missed analyst estimates which ranged from 418,000 to 427,000.
IS DEMAND COMING UNDER PRESSURE?
How worried should investors be? Gary Black, managing partner of The Future Fund, posed the question on Twitter that many Tesla backers will be thinking - ‘Is the miss due to a change to a more even regional mix of builds or are there demand issues?’.
If nothing else, the sales data will refuel the debate about demand especially given Tesla is unable to say much about the topic until it reports earnings on 25 January 2023. That will be followed by an investor day on 1 March.
‘Analysts will reduce 2023 volume and earnings per share as a result of this,’ said Black.
For the year, Tesla produced 1,369,611 cars and delivered 1,313,851, also representing growth of 47% and 40% respectively over 2021 figures.
Wedbush analyst Dan Ives said that ‘while bulls will not be super happy,’ he believes the fourth quarter saw relatively good performance in a tough backdrop.
‘Lot of moving parts but overall I would call this better than worst-case fears (above 400k) in a jittery macro,’ the analyst said.
ROUGH RIDE FOR TESLA SHARES
Tesla’s growth comes after a rough year for the company, its share price and shareholders. Tesla was one of the 10 biggest fallers during 2022 among the Nasdaq 100 and the S&P 500 last year, and has been under analyst scrutiny over what it and chief executive Elon Musk can do to turn around the ship. The last weeks of 2022 saw especially volatile trading.
But investors must also factor in rapid share price gains versus pre-pandemic levels. Tesla’s stock finished 2022 at $123.18, having traded at $60.07 just before the outbreak in February 2020.
Deliveries remain a key data point for investors to assess whether Tesla can maintain the necessary growth to support that sort of rise in valuation. China will play a substantial role in how demand plays out for Tesla in the years to come.
A likely worldwide recession could hit demand hard if consumers back away from big ticket purchases, while supply chain disruptions and commercial and military tensions between the US and China also raise questions in the medium-term.
A volatile ride is what Tesla investors should probably expect through 2023.
