Investors in Tesla stock are on pins and needles to see which electric-vehicle giant shows up when first-quarter delivery numbers are released in coming days. Will it be the Tesla (TSLA) that badly missed its fourth-quarter numbers and disappointed Wall Street a few months ago, or the automaker that lives up to analysts’ sky-high expectations?
On Jan. 3, the day after it missed fourth-quarter delivery estimates, Tesla shares sank more than 12%. That day remains the worst for Tesla stock in 2023. But shares have rebounded on the year, gaining around 57%.
Tesla is preparing to release first-quarter 2023 delivery and production data in early April with Wall Street expecting around 432,000 Tesla deliveries, according to FactSet. Based on previous releases, Tesla tends to report first-quarter delivery numbers on April 2.
If analyst predictions hold true, Tesla’s first-quarter numbers would represent a 39% increase compared with the 310,000 deliveries for the same period in 2022. Analysts predict Tesla deliveries in 2023 to come in around 1.8 million.
What The Fourth-Quarter Numbers Were
Tesla deliveries hit a record 405,278 in the fourth quarter of 2022, jumping 31% vs. a year earlier and nearly 18% vs. the third quarter’s 343,830. Deliveries swelled 40% to 1,313,851 in 2022, but well below the company’s 50% increase goal. Analysts had expected fourth-quarter Tesla deliveries of roughly 420,000.
Wedbush analyst Daniel Ives, a longtime Tesla bull, wrote Wednesday that Wall Street is looking closely at how “demand is holding up for (Chief Executive Elon) Musk & Co. in this shaky macro.”
Ives told investors Tesla should “at least” hit around 420,000 deliveries in the first quarter with “possible upside depending on logistics around deliveries this week.”
Ives’s view is Tesla will deliver 402,000 Model Y and Model 3 vehicles with 18,000 Model S and Model X deliveries. The mix will be “likely skewed on the upside for Model Y post price cuts in China and U.S.” Ives wrote.
“The macro remains uncertain and we would not be surprised to see more slight price cuts around the edges both in the U.S. and China over the coming months for Tesla to further stimulate consumer demand,” he cautioned.
Concerns Among Tesla Stock Analysts
But on Tuesday, Deutsche Bank (DB) trimmed Tesla’s first-quarter delivery estimates to 416,000, reflecting uncertainty about demand after the EV giant slashed prices earlier this year. This set off a price cutting war in China and the U.S.
This comes after Barclays analyst Dan Levy wrote Monday he expects a “modest” deliveries beat.
“Concerns have built on the pace of deliveries amid weakening demand signals. However, we believe commentary on the pace of production likely implies some upside, which we assume will be ~430k units in the quarter,” Levy wrote.
Levy said if Tesla deliveries are better than expected, it “could be a catalyst for the stock, as expectations have come down amid signs of softening demand.”
Tesla stock advanced 2.8% to 200.74 Friday during market trade. On Thursday, shares advanced 0.72% to 195.28. On Wednesday, TSLA stock climbed 2.5% to 193.88 amid lower-than-average volume.
Tesla Price Cuts And China
Meanwhile in China, the world’s largest EV market, Tesla is on pace for record monthly deliveries in March. Tesla sold 140,453 China-made vehicles in the first two months of the year. The global EV giant exported 57% of those vehicles to Europe and elsewhere.
On Tuesday, top Tesla competitor BYD (BYDDF) reported skyrocketing earnings for the fourth quarter and full year. This comes amid an EV price war in China triggered by Tesla, which led to BYD cutting prices on models to compete with Tesla.
Tesla trimmed prices in China on Jan. 6, following big cuts in late October, 2022. The global EV giant also significantly reduced prices in the U.S. and Europe on Jan. 13. In the U.S., Tesla also is benefiting from new tax credits. The company reduced European prices again in early March, with further U.S. discounts for the Model S and X.
However, Tesla’s lowest-priced vehicle, the Model 3, is expected to have its $7,500 U.S. EV tax credit reduced by April 18. The Biden administration announced Friday vehicles eligible for the full $7,500 tax credit must have batteries with specific amounts of components from North America and critical minerals sourced in the U.S. or from certain countries.
Vehicles that meet one of the critical minerals or battery components requirements will be eligible for a $3,750 tax credit.
The battery criteria goes into effect April 18, when a list of models that qualify for the full $7,500 tax credit will be issued.
The Model 3 contains a battery from China. Tesla’s Model 3 page on its website has a banner informing EV shoppers the “$7,500 tax credit is anticipated to be reduced for Model 3 on April 18. Take delivery now.”
Analysts say the average Tesla vehicle selling price in the first quarter was around $47,410, according to FactSet. That’s down from $51,400 in the fourth quarter and $52,100 a year ago.
Since March 13, Tesla stock has gained around 12% even as the failures of SVB Financial, Signature Bank of New York and Credit Suisse (CS) triggered worries of broader financial instability. By Friday’s market open, Tesla stock was down around 3% for the full month of March.
Before the bank failures, Tesla sold off hard from March 6 to 10, falling 12.3%. However, Tesla stock found support at its 50-day and 10-week moving averages.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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