Tesla Posts Record Q4 Deliveries of 405,000, But Misses Street Estimates

Tesla had its best year for deliveries on record despite what it described as “significant COVID and supply chain related challenges” throughout the whole of 2022.

Tesla  (TSLA) – Get Free Report posted weaker-than-expected fourth quarter deliveries, the carmaker detailed Monday, but still notched a all-time high overall tally for the year amid the biggest peak-to-trough decline for the stock on record.

Tesla delivered 405,278 new cars over the three months ending in December, the company said in a statement, up 31.5% from last year and 18.1% from the 343,000 tally reached over the three months ending in October.

Analysts were originally looking for a total of around 450,000, but that estimate was reduced over the past month following reports of a week-long shutdown at the carmaker’s key gigafactory in Shanghai.

Tesla delivered 388,131 units of its Model 3 and Model Y, as well as 17,147 units of its Model S and Model X, the report indicated.

Production rose to 439,701 vehicles, from the 365,000 made in the third quarter and the 305,000 tally recorded over the final three months of last year, thanks in part to supply chain disruptions and Covid-related closures at its Shanghai factory. 

Deliveries for the full year were pegged at 1,313,851, a 40% increase from 2021 levels.

“We continued to transition towards a more even regional mix of vehicle builds which again led to a further increase in cars in transit at the end of the quarter,” Tesla said in a statement. “Thank you to all of our customers, employees, suppliers, shareholders and supporters who helped us achieve a great 2022 in light of significant COVID and supply chain related challenges throughout the year.”

Tesla shares closed at $123.18 each on Friday December 31, after rising 1.12% on the session to extend the three-day gain to around 13%. For the year, however, the stock is down nearly 70%, its worst decline on record, and lost more than $706 million in market value.

Tesla will publish its fourth quarter earnings on January 25, with forecasts pointing to an adjusted bottom line of $1.24 per share on revenues of $25.5 billion. It will also host an Investor Day on March 1.

Last week, Morgan Stanley analyst Adam Jonas reiterated his ‘overweight’ rating on Tesla stock, but slashed $80 from his price target to a new level of $250 per share.

Jonas noted the group “may be in position to extend its lead vs. the EV competition (next year) even before consideration of Inflation Reduction Act benefits where Tesla also stands out as the biggest potential winner.

Portions of the IRA will allow buyers of Tesla Model 3 and Model Y sedans to reclaim a portion of their purchase price, up to $7,500 dollars, in federal tax credits.

“Within this environment, we believe players that are self-funded, with demonstrated scale and cost leadership throughout the value chain can be relative winners,” Jonas said.

The outlook echoes a similar bullish thesis from Baird analyst Ben Kallo, who lowered his price target on Tesla shares by around 11.5%, to $252 per share, but noted the company remains one of its “best ideas” for 2023 and held on to its ‘outperform’ rating.

Kallo said Tesla has ““many demand levers to pull including an increase in vehicle leasing and additional supercharging incentives” that could offset weakness in China, where a weeklong shutdown in production at its Shanghai factory rattled investors.

Short interest in Tesla shares remains elevated, however, with bets around the group pegged at around $12.4 billion, according to recent data from S3 Partners, a figure that represents around 2.72% of the group’s outstanding shares.

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