Tesla expects record fourth-quarter deliveries, but full-year targets still face challenges

According to news on December 29, Tesla, as the American electric vehicle giant, is preparing to announce its delivery results for the fourth quarter of this year. Although the market generally predicts that this data will once again set a new record, the full-year delivery volume may still fall short of the ambitious goal of two million vehicles set by the company's CEO Elon Musk at the beginning of the year.

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In 2023, faced with the challenge of slowing market demand, Tesla adopted a series of strategies to deal with it. One of them is taking advantage of its industry-leading profit margins to slash prices on four of its models globally. Especially in the Chinese market, which is not only one of Tesla's largest markets, but also a place where competition with local rivals such as BYD is fierce. The execution of this strategy not only consolidated Tesla's leadership position in the US market, but also forced other automakers such as Ford to re-evaluate their electrification strategies. As a result, Tesla stock has more than doubled this year.

The fourth quarter is typically Tesla’s highest delivery quarter, according to market analyst and senior analyst at CFRA Research Garrett Nelson. The fourth quarter of this year is expected to continue this trend. Tesla plans to release specific delivery and production data for the fourth quarter next Tuesday. According to market research, Tesla's global delivery volume is expected to reach 1.82 million vehicles in 2023, an increase of 37% over last year. Among them, delivery volume in the fourth quarter is expected to be approximately 473,000 vehicles.

At the beginning of this year, Musk confidently predicted that Tesla would deliver 2 million electric vehicles this year, barring force majeure. By October, however, Musk began to express concern about pressure from rising borrowing costs and falling market demand, making achieving that goal appear difficult. In order to stimulate year-end sales, Tesla has been increasing discounts on major models, and their goal is to maintain an average annual growth rate of 50% for many consecutive years.

As the new year approaches, Tesla faces various challenges. First, as some Tesla models in the U.S. and Germany will lose federal tax credit support, Tesla may need to further lower prices to remain competitive. Second, analysts made adjustments to Tesla's future deliveries. For example, Jairam Nathan, an analyst at Daiwa Capital Markets, lowered his 2024 delivery forecast from 2.14 million vehicles to 2.04 million vehicles and predicted that average revenue per vehicle will fall 4% from 2023. These adjustments may have an impact on Tesla's performance.

Tesla faces increasing challenges in terms of regulatory pressure. Recently, the company had to recall nearly all of its electric vehicles on the road in the United States to fix safety flaws. Tesla is also dealing with increased regulatory scrutiny of its self-driving systems and other components in the United States and Europe. Although Tesla CEO Musk is confident in the future of the fully autonomous driving system and believes that it will become an important part of Tesla's value, analysts generally believe that Tesla's newly released Cybertruck electric pickup truck and Model 3 refurbished version cannot significantly boost market demand.

Deutsche Bank analyst Emmanuel Rosner disclosed in a report that Tesla is currently in a low-growth transition, citing talks with Tesla's head of investor relations. Expect. The report states that Tesla plans to increase Cybertruck production and launch cheaper cars, but investors expect these moves to continue to put pressure on the company's profit margins. Tesla CEO Musk said that although Cybertruck will only account for a small proportion of future car production and faces huge mass production challenges, its unique design and concept still attract the attention of fans. RBC Capital Markets analyst Tom Narayan predicted in his report that the Cybertruck will account for 3% of Tesla deliveries by 2024. He sees Cybertruck as more of a "halo" product, designed to attract consumers' attention.

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