SUPERNEWS

Equities

Tesla's Q1 Delivery Expectations Lowered Amid Concerns, Stock Falls 1.1%

Tesla's Q1 delivery expectations adjust to around 425,000 units amid concerns over demand and production, reflecting cautious market optimism.

By Barry Stearns

ᐧ

4/1, 16:22 EDT
Tesla, Inc.
article-main-img

Key Takeaway

  • Tesla's Q1 delivery expectations adjusted to 425,000 units from initial 457,000 amid concerns over demand and production.
  • Tesla's stock fell by 1.1%, closing at just under $174, with 2024 earnings estimates cut to $2.90 a share.
  • Despite challenges, Tesla continues innovation with plans for Cybertruck and refreshed Model 3 amidst strategic price cuts.

Market Anticipation for Tesla's Q1 Deliveries

Tesla, the electric vehicle (EV) giant, has been at the center of Wall Street's attention as it approaches its first-quarter delivery report. Analysts' expectations, as aggregated by FactSet, initially set the bar at approximately 457,000 units, marking an 8% increase from the 423,000 units delivered in the first quarter of 2023. However, this consensus has been deemed overly optimistic by some, with Tesla's own compiled consensus from over two dozen analysts suggesting a more conservative estimate of around 443,000 units. Recent updates from a handful of analysts reviewed by Barron’s further adjusted this expectation to about 425,000 units, barely above the previous quarter's figures. The anticipation reflects a mix of concerns over slowing demand and production challenges, particularly with ramping up the refreshed Model 3 at Tesla's Fremont, California, plant.

Adjusting to Market Realities

Tesla's stock performance and earnings estimates have mirrored the adjustments in delivery expectations. The company's shares dropped by 1.1% in Monday trading, closing just under $174, amidst a broader market context where the S&P 500 also saw declines. This downturn in stock value comes in a quarter where Tesla's earnings estimates for 2024 have been significantly revised downwards from over $7 a share at the start of 2023 to about $2.90 a share. These adjustments are largely attributed to Tesla's strategic price cuts across its EV lineup, aimed at maintaining competitive edge and demand amidst rising competition and a challenging economic landscape.

Strategic Moves and Innovations

Despite the challenges, Tesla has not shied away from making bold strategic decisions and continuing its innovation streak. The company's price adjustments in China and its operational agility are testament to its commitment to maintaining a strong market presence globally. Tesla's resilience is further underscored by its plans to launch new models, including the much-anticipated Cybertruck and the refreshed Model 3, known as the Highland. These initiatives, coupled with Tesla's focus on advancing self-driving technology under Elon Musk's leadership, highlight the company's ongoing commitment to innovation and market leadership in the EV sector.

Street Views

  • Dan Ives, Wedbush (Neutral on Tesla):

    "With the stock dropping about 30% in the first quarter, investors are bracing for the worst. They will be relieved with a delivery number north of 420,000 units... His estimate for the first quarter is 425,000 units."