“Delivery growth will have to quicken hit Musk’s annual target,” wrote Gene Munster, a managing partner with Deepwater Asset Management and Tesla bull. Higher than recent quarters but still reasonable vs historical supply levels and still significantly below the industry, which is 2-3x this number depending on the manufacturer. Tesla enters Q2-23 with 88k inventory vehicles or 16 days of sales. Yet when your stock is the eighth most valuable megacap in the world and is worth $650 billion, more than the next seven largest automakers combined, there is precious little leeway for disappointment. Instead of the typical focus on year-over-year volume gains-where Musk always impresses thanks to the growing adoption of EVs-investors importantly cast their judgment based on Tesla’s improvement from one quarter to the next.Īnd here the 4.3% increase over Q4 is lackluster at best when viewed in conjunction with growing inventories and price cuts.īulls argue the first quarter is traditionally weak because of the Chinese Lunar New Year, while sales were hampered because price cuts only began bolstering volumes starting in mid-January. Story continues Tesla is judged differentlyĪs a growth stock that aspires to an average annual volume growth of 50%, a truly staggering figure in the manufacturing industry, it’s important to remember the market judges Tesla’s development differently from that of other incumbent carmakers. Musk’s own Twitter warriors used his Community Notes feature to prod Reuters into correcting a headline that Q1 deliveries actually fell short of expectations (the news agency uses its own proprietary polling data from data partner Refinitiv that differed from those compiled by Bloomberg). The disappointment over its tepid Q1 sales gain led to a furious struggle over control of the narrative on social media. “Even with price cuts they seem to have lost the high-end customers this quarter.” “Delivery numbers for X/S are a bit troubling,” wrote Ross Gerber, longtime Tesla bull and CEO of fund manager Gerber Kawasaki. Tesla blamed Q1’s weak Model S and X volumes on this very issue, but the assurances fell on skeptical ears. Musk’s company has repeatedly claimed the gap is due to an increase in cars “in transit” as Tesla transitions away from prioritizing cars slated for export early in the quarter before focusing on domestic demand. In the trailing 12 months, Tesla has built more than 78,000 cars than it has delivered to customers. Independent analysts calculate the level to be north of that official figure. In a worrying sign, excess supply as reported by Tesla hit 13 days’ worth of sales at last quarter’s pace, a two-thirds increase over the year’s end and its highest since the third quarter of 2020 drew to a close. The fear is the desire to claim yet another record will come at the cost of its prized margins. Shares, which rallied more than 6% on Friday ahead of this weekend’s results, are indicated to open lower as investors are expected to take profit on their recent bullish bets.ĭespite juicing sluggish demand with price cuts the world over, Musk eked out an increase of only 4.3% in deliveries over the final three months of December. Tesla’s record first-quarter vehicle sales belie growing concerns that CEO Elon Musk’s inventory of unsold vehicles is reaching unhealthy dimensions despite the generous use of rebates to move metal.
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