It’s true that Tesla has been very successful in the US electric vehicle (EV) market. They have become the darling of consumers and media alike. However, it’s also true that Wall Street has only sometimes been impressed with the company’s performance.
Tesla’s stock price has been highly volatile and has experienced both highs and lows. Some investors have been skeptical of the company’s ability to continue growing and have expressed concerns about its financial health. Despite these challenges, Tesla has remained a leader in the EV market. They have continued to innovate and expand its product line.
How much did Tesla dominate the US EV market?
Tesla just released its production and delivery numbers for the fourth quarter of 2022. In the last three months of 2022, Tesla made 439,701 cars. This brought the total number of cars made each year to 1.37 million, which was 47% more than the previous year.
Even though the automaker delivered a record number of cars, it fell short of Wall Street’s expectations of between 420,000 and 425,000 cars.
The electric vehicle company also said that they made a total of 439,701 vehicles in the fourth quarter. This means that Tesla will deliver a total of 1.31 million cars each year and make a total of 1.37 million cars in 2022.
Even though Tesla’s deliveries grew by an impressive 40%, the company still needed to meet its goals for the year for production and deliveries to grow by 50%. To meet that goal, the automaker would have had to sell 495,760 cars in Q4.
The number of cars Tesla sold in the third quarter, 343,830, is up in the fourth quarter. Last-minute discounts from the automaker helped Tesla at the end of the quarter. In part because of the Inflation Reduction Act’s EV tax credits, which would give Tesla buyers rebates of up to $7,500, Tesla cut the prices of Model 3 and Model Y cars delivered in the US in December by $3250 at the beginning of December and $7500.
Investors’ outlook on Tesla sales
Investors in Tesla put a lot of weight on delivery numbers because they are the closest thing the company says it can say about sales.
Tesla reported delivering 1.31 million cars in 2022, a 40% increase from last year. Even though this growth rate is impressive, the electric car company still needs to reach its original goal of doubling the number of cars it sells yearly.
For the year, there would have had to be more than 1,4 million deliveries at this growth rate. Tesla says this poor performance is because the company has changed how it gets cars to customers. Because of these changes, more cars were in transit at the end of the year on their way to their final destination.
Tesla’s External Woes
The US tax credit that started in 2023 also contributed. Many customers chose to delay their deliveries until the end of 2022 to save money. Tesla eventually gave customers who would miss out on the tax credit a discount to make up for it.
The fourth quarter of 2022 was hard for Tesla, mostly because a Covid outbreak in China stopped production at its Shanghai factory for a short time. During the fourth quarter, Tesla offered steep discounts and promotions in the US, China, and other places to boost demand, which put pressure on its margins.
In the last quarter of 2022, Tesla also offered discounts in Mexico and China, but it needs to be clarified how those price cuts would have affected the automaker’s margins.
The production and delivery report from Tesla doesn’t break down the numbers by region, but Tesla has said that production at its two new factories in Austin and Berlin has picked up in recent months. The company has also increased production at its factories in Fremont and Shanghai, which COVID-19 control measures had slowed down.
Wall Street’s Expectations from 2022
Despite a tough quarter, Wall Street expected Tesla’s sales to grow by more than 50% in 2022. This, in turn, would have brought in more than $82 billion.
Analysts think that by 2021, profits will have grown by more than 100% to almost $13 billion. Tesla grew in 2022 because it has two new factories. One is in Austin, Texas, and the other is in Brandenburg, Germany.
On January 25th, 2023, Tesla will give a full report of how it did in the fourth quarter. Also, Tesla announced that it would hold its first-ever Investor Day on March 1st. At this event, the company will talk about its next-generation vehicle platform, among other things.
What to look out for?
Some investors are concerned that China’s lack of COVID-19 control measures may hurt Tesla sales during a pandemic. Many are also concerned about Elon Musk’s antics and diversion from Twitter’s redesign.
The company’s share price has fallen about 54% over the past six months. It fell another 12.46% on Tuesday to $107.83. Even record deliveries cannot offset Tesla’s present investor troubles. In the past, Tesla’s announcement of delivery numbers has led the automaker’s stock to rise.
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