Tesla Deliveries Hit Record 405,278 In Q4, But Miss Views Despite Big Incentives

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Tesla (TSLA) deliveries hit a record 405,278 in the fourth quarter, the EV giant said Monday, missing lowered forecasts despite aggressive year-end incentives. That comes after Tesla stock plunged in December and in 2022.




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Tesla deliveries jumped 31% vs. a year earlier and nearly 18% vs. Q3’s 343,830. Deliveries swelled 40% to 1,313,851 in 2022, but well below the 50% goal.

Analysts had expected Q4 Tesla deliveries of roughly 420,000, whittled down significantly in the past few weeks.. Tesla’s Q3 deliveries also had fallen short.

Q4 deliveries included 388,131 Model 3 and Model Y vehicles, with 17,147 Model S and X luxury EVs.

The figures do not include any Tesla Semi deliveries. Some were delivered to Pepsi in Q4

Q4 production swelled to 439,701 in the fourth quarter, exceeding deliveries by more than 34,000. In Q3, output topped sales by just over 22,000.

Tesla’s China-based EV rivals reported strong Q4 deliveries over the weekend.

Tesla Production

Tesla production came in at 439,701 in the fourth quarter, exceeding deliveries by more than 34,000. In Q3, output topped sales by just over 22,000.

Output could have been significantly higher.

Tesla Shanghai slowed output on Dec. 12 and suspended production on Dec. 24 amid a lack of demand. Output was set to restart on Monday, but then have an extended halt from Jan. 21-30 amid the Chinese New Year.

Still, with output ramping up in Berlin and Austin, Tesla’s overall production capacity is now well above 450,000 a quarter.


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Tesla Incentives

Tesla offered hefty discounts in its major markets to move the metal before year-end. In China, a late October price cut was followed by discounts and insurance subsidies. In the U.S., Tesla offered $7,500 off Model 3 and Y vehicles for year-end delivery, adding Model S and X to the offer for the last two days of 2022.

If demand were red hot, Tesla deliveries could have topped 450,000 in Q4 given its production capacity and existing inventory.

Tesla EV Subsidies Rise, Fall

In 2023, new U.S. tax credits of up to $7,500 will help Tesla demand at home, but they are subject to a variety of conditions, with income and price caps. The Model 3 faces a $55,000 price cap, meaning the base model is eligible but the higher-end trim is not. The Model Y, which starts at $65,990, generally faces a $55,000 price cap as well. But the less-popular seven-seat version has an $80,000 cap.

It’s unclear how Tesla might adapt pricing and production as a result of the tax credits.

Meanwhile, China EV subsidies of 11,088 yuan ($1,607) have ended.

Tesla has already essentially absorbed the expiring subsidy by leaving official prices steady. It also extended year-end discounts worth 10,000 yuan through February.

Several European countries have cut or eliminated EV subsidies as well, including Germany.

 


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Tesla Stock

Tesla stock plunged 37% in December and 65% for 2022, even with a bounce at the very end of the year. Blame concerns about Tesla demand, the overall weak market for growth stocks and concerns about Elon Musk and Twitter.

Analysts Still Bullish On Tesla Stock

Despite Tesla stock’s recent plunge, analysts are signaling it is still a strong play.

On Thursday, Piper Sandler analyst Alexander Potter wrote that “bearishly-inclined traders” and tax-loss sellers are “pouncing on every bit of incrementally negative news.”

Potter added that while Tesla growth “could easily slow” in 2023 due to a recession, rising interest rates and “tapped-out” demand, the company’s market share is not “suddenly succumbing to a wave of new competition.”

“Bottom line: We don’t see any red flags in these data sets,” Potter wrote of Tesla’s major sales regions.

This follows Baird analyst Ben Kallo cutting his Tesla price target to 252, down from 316, on Wednesday but touting Tesla as a “Best Idea” stock for investors in 2023.

The prior week, six analysts cut price targets on TSLA shares. However, targets remain well above Tesla stock’s current price level, and analysts have broadly maintained buy and outperform ratings. Wedbush analyst Daniel Ives, a longtime Tesla bull, also weighed in this week, expressing optimism for the EV giant.

The analyst wrote that around 70% of the recent Tesla stock sell-off is due to the reaction to Musk and his involvement and focus on Twitter. Ives said if Musk refocuses on Tesla and stops selling TSLA shares, “then this stock has bottomed in our opinion and works from here.”

Please follow Kit Norton on Twitter @KitNorton for more coverage.

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