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Even an investor and genuine Tesla fan like Wedbush’s Dan Ives admits that the first quarter was a nightmare. Demand in China is worrying and the American brand is suffering. But it is not just a Chinese issue. Of course, the production stops imposed by the arson at the Berlin gigafactory have had an impact on supply, as has the update of the Model 3 Highland in the United States, but the problems are all on the table and the delivery estimates for the year are at risk to be revised downwards. That is, the 2.1 million target could be scaled back. Also due to the trend of electric cars in general, in 2024 which will see a decline in demand.
Meanwhile, the market has been acknowledging for months that the picture is not brilliant. Just remember, for example, that the price war has proven to be a double-edged sword: Teslas are the cars that depreciate the fastest. Investors have been taking note of this for months: -30% since the end of September. Similar trend (-28%) in 2024. It is the worst stock in the S&P500, which has gained almost 11% since the beginning of the year. Since May 2023 the haemorrhage has amounted to 350 billion dollars (today Tesla is worth around 550 billion).
Reduced estimates
The still-largest-capitalization automaker is expected to present data on deliveries between January and March on Tuesday. Estimates have gone from 475 thousand to forecasts ranging between 425 thousand and just over 400 thousand, depending on the analysts. An unprecedented decline year on year, if we exclude the Covid crisis. This is due to a slowdown in sales on both the US and Chinese markets.
«Delivery estimates have been greatly reduced and this has really damaged investor confidence in the brand. It will be difficult to make the first quarter numbers look positive, even if they modestly beat expectations”, comments Nicholas Colas, co-founder of DataTrek Research.
«The focus for investors on Tesla right now will be delivery volume and gross margin. The direction of the stock will be based on these numbers versus whispered expectations,” according to David Wagner, portfolio manager at Aptus Capital Advisors.