Tesla Deliveries Forecasted to Decline: Wall Street analysts are sounding the alarm as Tesla’s third-quarter report is coming out. Delivery estimates may not be met, which is caused by strategic facility closures and a car market that pushes the company to offer more discounts.
As the report’s release date gets closer, experts from Barclays, Baird, and Guggenheim say that this likely glitch is caused by planned downtime at Tesla’s production centers in Europe and China. These short breaks are scheduled so that the improved Model 3 car and the Cybertruck can be made and more equipment can be added.
But despite the current situation, an excellent fourth quarter may still be possible. Analysts say that this recalibrating phase puts Tesla (TSLA.O) in a position to update its ageing car lineup, which could give it an edge over American competitors like Ford and BYD in China.
The financial experts’ crystal ball says that Tesla could deliver between 439,200 and 455,000 cars in the September quarter. But this is less than the average of 458,713 vehicles that Wall Street was expecting, LSEG’s figures show. The LSEG number shows that deliveries dropped by 1.6% from the previous quarter. This would be the first sequential drop in deliveries for Tesla since the second quarter of 2022.
Several experts in the industry say that a disappointing report could mean that prices will have to go down even more to get sales going again. This is because there is more competition and less desire for electric cars. In a recent study, Guggenheim shows how wrong demand signals continue even after supply chain problems, making it more likely that prices will go down again.
But there may be a cost to this that could hurt Tesla’s market-leading profit margins, which had already hit a four-year low in the second quarter because of the price war the company started in January.
Also Read: Mercedes Electric Vehicle Range Surpasses Tesla Amid Growing China Competition
During the third quarter, Tesla cut the prices of its Model S and Model X cars by 14% to 21% in the U.S. and China, among other important markets. In the U.S., prices on the top-of-the-line Model 3 and Model Y were raised by almost $5,000 simultaneously. Part of this planned performance was making a strategic change to the cost of the Model Y in China and adding more rewards.
Tesla wants to reduce production at its German plant because demand is low. Business Insider made this fact public, which adds another layer to the story.
Despite these problems, there is still hope for the fourth quarter. The success of the redesigned Model 3, which will be released in Europe and China, could be the key to Tesla’s comeback.
Early reviews of the updated Model 3 are positive, and changes in wait times show that demand is vital, especially in China. Even though the market is challenging.
The fact that autoworkers at the “Detroit Three”Ford, General Motors, and Stellantisare still on strike adds more drama to Tesla’s problems. The strike, which is getting close to its third week, makes it more likely that these well-known automakers will raise their prices, which could make Tesla more appealing to investors.
Thomas Martin, a senior portfolio manager at Globalt Investments, which owns Tesla shares, said you should not invest in Ford or General Motors Many American investors see Tesla as the top of the electric vehicle business, with the power to keep the stock steady during rough times.
A nearly 100% jump shows how the electric car pioneer has made a lasting symphony. Even though Tesla shares have dropped almost 5% this month because of worries about a supply problem.
Our Reader’s Queries
What is the delivery projection for Tesla 2023?
Tesla has reaffirmed its target of delivering 1.8 million vehicles, as stated in its Q3 earnings report. However, recent projections from analysts have slightly lowered this figure since October 18th. According to FactSet, the Wall Street consensus now predicts that Tesla will deliver 1.797 million vehicles in 2023, which is just below the company’s target.
Is Tesla losing popularity?
Cox Automotive recently released their Electric Vehicle Sales Report for the third quarter, revealing that Tesla’s market share has dropped to a record low of 50%. This is a significant decrease from the previous year’s 65%.
Are Tesla sales slowing down?
Tesla’s vehicle deliveries continue to increase, albeit at a slower pace, despite significant price reductions. However, there are concerns regarding the feasibility of charging vehicles during long drives, as well as the cost and government subsidy requirements. It appears that the rate of sales growth has indeed decelerated.
What is the projection for Tesla sales in 2023?
The company experienced a remarkable 40% growth in deliveries from 2021 to 2022. During their last earnings call in October 2023, Tesla executives projected a minimum of 1.8 million deliveries for the year, after revising their initial goal of 2 million.