Shares of Tesla (TSLA -9%) are pulling back today following the EV maker’s Q4 Delivery and Production report. Growth was substantial, with TSLA’s total vehicle production jumping 44% yr/yr to 439,701 while deliveries climbed 31% to 405,278. However, TSLA’s record deliveries still missed analyst expectations, its third consecutive miss. It also does not help that analysts trimmed their estimates in the weeks leading to TSLA’s report.
Meanwhile, the gap between production and deliveries grew wider sequentially in Q4, keeping demand concerns in the spotlight. However, the gap remains related to TSLA’s transition towards a more even regional mix of vehicle builds to contend with the increasing difficulty of securing vehicle transportation at a reasonable cost.
This was set in motion last quarter, resulting in an uptick in cars in transit at the end of Q3. The same held true in Q4; TSLA commented that its ongoing transition again led to a further increase in vehicles in transit at the end of the quarter.
Still, in China, competition is heating up as TSLA’s Chinese competitors, NIO (NIO), Li Auto (LI), and Xpeng (XPEV), are all punching it today after posting upbeat delivery data. NIO and LI each grew deliveries by over 50% yr/yr during December, while XPEV’s deliveries surged 94% from the prior month in December.
The silver lining is that demand remains robust even as China faces a spike in COVID-19 cases. However, with China comprising just under a third of TSLA’s total revs in FY21, fiercer competition in the region adds another obstacle to TSLA’s growing list of headwinds.
Bottom line, TSLA is starting off the new year in the wrong gear, keeping its shares stuck in a downward trend. The stock fell roughly 70% in 2022, tumbling by 60% over just the past three months. However, with the new EV tax credits kicking in and Mr. Musk noting he would abide by the results of a recent Twitter poll and step down as CEO, perhaps investors will buy today’s news, helping TSLA to begin turning a corner.
