Tesla’s Deliveries Raise Fresh Questions About Demand, Earnings

Tesla’s lower-than-expected Q1 vehicle deliveries led most analysts to lower their estimates for the electric carmaker’s full-year earnings. After a brief decline, the stock price somewhat increased by Wednesday’s closing.
Unmet Goals and Business Obstacles

Tesla exceeded even the most bullish expert estimates in Q1 by delivering 386,810 cars. This was the company’s lowest quarterly production since the second quarter of 2022.

Factory shutdowns and the heightened production of the upgraded Model 3 were blamed for the shortage. Investors expressed concern over this performance. Elon Musk backers like Ross Gerber demanded a leadership transition at the business, and Wedbush’s Dan Ives referred to the quarter as a “disaster.”

Analyst Reactions, Stock Performance

Following the announcement, analysts markedly lowered their 2024 earnings projections for Tesla. Wall Street profits per share are predicted to drop to roughly $2.81 by 2023, a 10% decrease. This is a significant divergence from the early estimates of improved profitability in 2024 made by the analyst consensus.

Tesla’s stock dropped at first, but by Wednesday it had bounced back and was trading at $168. Tesla’s stock has fallen in 2024 despite recent advances, making it the poorest performer on the S&P 500 thus far this year.

Looking Ahead: A Potential Return?

Even with the unimpressive first quarter, several analysts predict that Tesla’s business will improve in the upcoming months. Due to a seasonal upturn in China and increased Model 3 and Cybertruck sales in the US, Q2 deliveries may increase. But in China, the biggest EV market in the world, the rivalry has gotten fiercer.
In an attempt to keep up the sales pace, Tesla has also been aggressively slashing pricing and providing discounts, which has affected its automobile gross margins. For its Model Y inventory, Tesla is still offering substantial discounts in spite of the recent price increases in the US, Europe, and China.

Some Analysts Are Still Upbeat

Despite the challenges, some people continue to have a positive outlook on Tesla, as shown by their huge purchases of the company’s stock. In summary, Tesla is about to enter a crucial stage. Apart from managing investor concerns and production obstacles, the company needs to maintain its competitive edge in the rapidly growing electric vehicle industry. When Tesla releases its earnings on April 23, we’ll be closely monitoring to see if it can make a turnaround.