Tesla shares fall more than 12% after deliveries report

Tesla shares fell 12% after the electric car manufacturer revealed its fourth-quarter 2022 vehicle production and delivery numbers, underperforming analysts’ estimates and the company’s expected target.

The company reported 1.31 million deliveries overall for the year and a total of 405,278 deliveries for the fourth quarter. Deliveries increased by 40% from 2021 setting a new high for the Elon Musk-led carmaker.

Tesla’s shares saw a year-long decline in 2022, which led CEO Musk to advise staff not to be “too concerned by stock market madness” in late December. Musk has attributed a portion of Tesla’s plummeting share price to rising interest rates. However, his problematic $44 billion Twitter takeover is another significant culprit, according to critics. 

At Berstein, Toni Sacconaghi predicts that Tesla will see a new demand issue in 2023. Tesla’s annual order run rate in Q4 was only about 1 million units, the company said in a note earlier this week. The company’s goal is to sell close to 2 million vehicles by 2023. Yet, demand issues are anticipated to continue in 2023. The 7-seat Model Y option, which costs roughly $3000, is the only Tesla model that appears to now be eligible for any inflation reduction act rebates, he adds. 

However, Baird analyst Ben Kallo, who previously named Tesla one of his top picks for 2023, kept an outperform rating and declared that he would continue to buy the stock before the company’s upcoming earnings report on January 25. 

Overall, there are obstacles for all auto firms to overcome in the year ahead, including a weaker global environment, record-high affordability, and increased competition.

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