(Bloomberg) – Tesla Inc. delivered fewer vehicles than analysts expected last quarter, missing estimates despite taking the unusual step of offering attractive offers in its two largest markets.
Most read from Bloomberg
The company has delivered 405,278 vehicles to customers in the past three months, well below Bloomberg’s average estimate of 420,760. Although total sales hit a quarterly record for Tesla, the company opened two new assembly plants last year and has yet to hit its goal of expanding deliveries by 50%.
After CEO Elon Musk predicted an “epic” year-end, Tesla lowered car prices and production in China, then cut prices by $7,500 in the US. Concerns about rising interest rates, inflation and other economic headwinds – plus alarm over Musk’s antics on Twitter, the company he now owns – sent Tesla shares plunging 37 % in December and 65% last year.
“We believe Tesla is facing a serious demand problem,” Toni Sacconaghi, a Bernstein analyst with a comparable sell rating, wrote in a report Monday. “We believe Tesla will need to reduce its growth targets (and run its factories below capacity) or maintain and potentially increase recent price cuts globally, putting pressure on profit margin.”
Read more: Tesla stock has its worst year ever. That doesn’t make it cheap
Tesla increased its deliveries by 40% to 1.31 million last year, well below the 50% average annual growth rate the company said it expected to achieve over many years. Production expanded 47% to 1.37 million.
The company produced 439,701 vehicles in the fourth quarter, exceeding deliveries of 34,423 units. Tesla said it continued to transition to “a more even mix of vehicles made by region,” which led to another increase in transportation cars at the end of the quarter.
Gene Munster, managing partner at Loup Ventures, said by phone: “Tesla sells cars and the auto industry is slowing down. “They are still struggling with logistics, and the gap between production and delivery has increased from the previous quarter.”
Tesla’s quarterly delivery figures are seen by many as a barometer for overall electric vehicle demand, as the Austin, Texas-based company has led in charge of battery-powered cars.
The company has a long tradition of going all out at the end of each quarter to deliver cars to customers, with top executives like design director Franz von Holzhausen helping out at a delivery center in southern California on New Year’s Eve.
Tesla doesn’t break down sales by region, but the United States and China are its biggest markets, and 95% of sales in 2022 will be for the Model 3 sedan and Y crossover.
The company makes Models S, X, 3, and Y at its factory in Fremont, California. Its Shanghai factory makes the Model 3 and Y, and started delivering Model Ys from its newest plants in Austin and near Berlin in the first half of last year.
While Musk handed over Tesla’s first Semi trucks to PepsiCo Inc. in December, the company did not report any deliveries of the model in its quarterly report. The automaker has separately announced that it has scheduled an investment day for March 1, where it will discuss its long-term expansion plans, next-generation vehicle platforms, allocations, and more. capital and other topics.
–With support from Craig Trudell.
Most read from Bloomberg Businessweek
©2023 Bloomberg LP