Tesla rises on revenue, upcoming vehicles despite sales miss

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Tesla (TSLA) reported mixed fourth-quarter results on Wednesday, which beat earnings estimates but missed revenue guidance. Tesla shares rose Wednesday, extending a powerful recovery of more than 40% from bear market lows.




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After a terrible 2022, in which Tesla shares plummeted sharply in December, shares plummeted again to start 2023. However, Tesla bounced back since the big price cuts announced on January 6 for vehicles in China, and has continued to rise since the announcement of price cuts in the US and Europe. a week later.

Analysts and investors will take a close look at the results on Wednesday to get a better idea of ​​what Tesla expects for 2o23.

Tesla stock rose 1.7% after hours. Shares rose 0.4% to 144.47 during Wednesday’s market trading and reversed higher.

Tesla earnings

estimates: Analysts predict fourth-quarter earnings will rise 33% to $1.13 per share. At the end of December 2022, analysts forecast earnings per share of $1.25. Analysts had set the revenue target at 39% growth, to $24.67 billion.

merits: Tesla’s earnings per share rose 40% to $1.19, while fourth-quarter revenue grew 37% to $24.32 billion.

For the full year, sales increased 51% to $81.46 billion, beating estimates. Earnings rose 80% to $4.07 per share, beating Wall Street expectations.

Tesla had already announced that its fourth-quarter deliveries hit a record 405,278. As a result, forecasts were not met despite aggressive year-end incentives. Vehicle deliveries were up 31% from a year earlier and nearly 18% from Q3’s 343,830. Shipments also increased by 40% to 1,313,851 in 2022. That was well below the company’s growth target of 50%.

Analysts had expected Tesla deliveries of about 420,000 in Q4, significantly lower than higher estimates. Tesla’s Q3 deliveries had also fallen short.

Tesla production was 439,701 in the fourth quarter, more than 34,000 more than shipments. In the third quarter, production exceeded sales by just over 22,000. Tesla production was 439,701 in the fourth quarter, more than 34,000 more than shipments. In the third quarter, production exceeded sales by just over 22,000.

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With production ramping up at the company’s plants in Berlin and Austin, Texas, Tesla’s total production capacity is now well above 450,000 per quarter.

Tesla unit sales totaled 1,313,851 for 2022, up 40% from 2021 but below the 50% target. The Model 3 sedan and the Model Y crossover accounted for the vast majority of sales. The high-end Model S and X vehicles accounted for the rest.

Meanwhile, the Cybertruck is scheduled for release in 2023, which would be Tesla’s first new model since the launch of Model Y in early 2020. The oft-delayed truck will enter “early production” midway through the year, according to CEO Elon Musk. Other reports say the Cybertruck will begin mass production in late 2023.

Tesla also began supplying its long-haul semi trucks to PepsiCo (PEP) in December. It’s unclear how many semi-trucks will be produced in 2023, with key pricing and specifications still unclear. Tesla plans to build a $3.5 billion manufacturing facility in Northern Nevada for semi-trucks, according to the Nevada Independent.

On Wednesday, Tesla confirmed that manufacturing and delivery challenges in 2022 were “largely concentrated in China.”

Tesla plans to grow its production volume “as quickly as possible” to match its target of 50% compound annual growth (CAGR). That goal dates back to 2021. For 2023, Tesla expects to produce approximately 1.8 million vehicles, an increase of 37% compared to 2022.

The EV giant also said the Cybertruck remains “on track to begin production later this year”.

The company added that its next-generation vehicle platform is in development and additional details would be shared at its Investor Day on March 1, 2023.

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Tesla Stock: Earnings Come After Price Cuts

Tesla’s Q4 earnings follow Tesla China EV registrations bounce in the week of January 5-16 following recent major price cuts. The most recent registration numbers appear to reflect some benefit from Tesla’s Jan. 6 decision to cut prices in China.

Tesla slashed prices for the Model 3 and Y in China, slashing the base Model 3 by more than 13% to $33,570. Local media reports in China suggested Tesla received 30,000 orders within three days of the cuts announced, according to CnEVPost.

Tesla has also announced price cuts in the US and Europe. This makes more models eligible for $7,500 tax credits under the Inflation Reduction Act (IRA).

The EV giant slashed US Model 3 prices by 6%-14%, depending on trim. A standard equipment Model 3 RWD is reduced by $3,000 to $43,990. With the IRA tax credit applied to the vehicle, consumers meeting the income limits would pay $36,240.

The Performance Model 3 trim was reduced from $9,000 to $53,990, putting it below the $55,000 limit for tax credits. Meanwhile, Tesla’s base Model Y has been reduced by $13,000, or nearly 20%, to $52,990, also below the tax credit limit. The Performance variant for that vehicle has been reduced to $56,990, also down from $13,000.

Musk told investors Wednesday that Tesla has seen “the strongest orders to date in our history so far in January.” Tesla’s CEO said orders are currently coming in at “nearly double the production rate” and that this is resulting in higher prices for Model Y.

“I think there’s just a large number of people who want to buy a Tesla car but can’t afford it. And so these price changes are really making a difference to the average consumer,” Musk said.

“It has always been our goal at Tesla to make cars that are affordable for as many people as possible, so I’m glad we can do this,” he added.

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State of self-driving

Musk said on Wednesday’s earnings call that Tesla has implemented Full Self Driving (FSD) Beta for city streets for about 400,000 customers in North America.

According to Musk, the EV giant is currently sitting at about 100 million miles FSD, not counting highway driving.

“We wouldn’t have released the FSD beta if the safety metrics weren’t excellent,” Musk said.

The Tesla CEO added that almost all Tesla vehicles are currently capable of uploading self-driving software.

“That means there are millions of fully self-driving cars that can be sold at essentially 100% gross margin,” Musk said. “The value of FSD grows as autonomous power grows, and when it becomes fully autonomous, that is an increase in fleet value that may be the largest asset increase in history.”

Tesla stock

Tesla stock is up 43% since a Jan. 6 low of 101.81, approaching their 50-day, 10-week lines.

That’s despite a number of analysts also weighing in on Tesla stock, lowering price targets and earnings expectations.

TSLA stock ranks third in the Automakers industry group. Tesla stock has a 46 Composite Rating of 99. The stock has a 5 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for price movement. The EPS score is 75.

Follow Kit Norton on Twitter @KitNorton for more coverage.

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