Tesla Inc (NASDAQ:TSLA) will look to prove the bubble has not burst – as implied by a 65% drop in its share price last year – when it reports full-year results after market close on Wednesday.
Having already confirmed it missed fourth-quarter delivery targets of 418,000 units, the electric vehicle (EV) giant said its achieved figure of 405,278 came “in light of significant COVID and supply chain related challenges” seen in 2022.
Tesla ultimately fell 10% short of its annual growth target of 50%, as full-year deliveries hit 1.31mln and production reached 1.37mln units, up 40% and 47% compared to 2021 respectively.
While one said this meant "the Cinderalla ride was over" and leaves the company and boss Elon Musk at a major "fork in the road", some analysts were upbeat though, with these figures marking new records for the company.
Full-year revenues are expected to be around US$82bn, a rise of over 50% but Michael Hewson at CMC Markets warned “margins are likely to be lower,” given higher operating costs and Tesla’s decision to cut its prices.
For the fourth quarter, estimates are for EPS of US$1.15 on revenue of US$24.2bln.
Tesla's expansion into European production with a new gigafactory in Berlin also means the long-term outlook looks more promising, according to Hargreaves Lansdown analyst Susannah Streeter, as well as a new factory in Austin, Texas.
As Europe’s EV revolution approaches with a series of bans on internal combustion engine vehicles in the 2030’s, and even a mandate on sales in the UK before then, Tesla is “well placed to capitalise on the upward swing in demand,” she said, after opening the factory in March last year.
China’s reopening from Covid lockdown could also mark good news for Tesla and is something investors will keep a keen eye on, potentially boosting demand and helping to ease supply chain woes seen during 2022.
Broker Wedbush conducted a survey of 500 EV consumers in mainland China, following recent Tesla price cuts, with findings indicating 76% of prospective EV car buyers are considering a Tesla in 2023, with the nearest domestic competitors BYD in second place followed by NIO Inc (NYSE:NIO) in third place.
Even with price cuts, one issue Tesla won’t be able to escape is that “an electric car remains a luxury for most people,” said Hewson, especially with rising living costs and charging also not helped by rising energy costs.
Tesla’s share price has rebounded some 18% in 2023 after a poor performance last year, made worse by chief executive Musk offloading US$40bn worth of stock to fund his takeover of Twitter.
Positive sentiment and Musk’s promise to hold onto his shares may soon be tested though, with Elon set to soon be hit by a US$1.5bn interest bill on his US$13bn Twitter debt, according to the Financial Times.