- EV maker tops analyst deliveries expectations in fourth quarter
- Buffett-backed Chinese rival BYD rapidly closing gap on Tesla
- Tesla stock rallied 130% in 2023, can it hit accelerator again?
Tesla beat analyst consensus on electric vehicle deliveries in the fourth quarter of 2023, handing the keys to customers for 484,507 EV units. This was above the analyst consensus pitched at 480,500 units.
It left Tesla as the world’s top EV manufacturer in 2023, recording 1.81 million EV deliveries, reflecting a 38% year-on-year increase.
It’s the sort of confirmation that might have got investors excited and sent the shares higher… but it didn’t. In fact, the stock drifted lower, albeit modestly, from $248.48 to $248.42 at the close on 2 January 2024.
WHY DID TESLA FALL?
Three things are playing on the market’s mind when it comes to Tesla. First, there are questions over Tesla’s 20% deliveries growth target for 2024. This has come direct from Elon Musk himself and calls for roughly 2.2 million EV deliveries this year, helped by Cybertruck launched late last year.
That could be a tough ask given the increasing competition from China’s army of manufacturers. Tesla was overtaken by Warren Buffett-backed BYD in the same quarter, which reported record sales of battery-powered EVs of 526,000, and other EV makers are gaining ground.
BYD delivered 1.58 million fully electric cars in 2023.
PRICE CUTS & MARGINS
Staving off Chinese competition will load more pressure on Tesla margins, another big question for Tesla to answer in 2024. ‘We model 15.7% versus consensus of 17.8% [gross margins] but see potential downside given the impact of price cuts in September and October as well as significant discounting of inventory models in the quarter’, analysts at Bernstein told clients in a note this week.
Bernstein has a price target on Tesla stock of just $150, 40% below current levels.
This neatly brings us to a third dilemma facing investors - share price momentum. Tesla had plenty last year as the shares soared 130%, clocking up levels not seen since peak pandemic. But can they maintain their oomph in 2024?
This is arguably the key question for Tesla investors right now.
