Tesla (TSLA, $242.40) reported its third-quarter production and delivery numbers this past Sunday. Investors were disappointed by the figures, and TSLA stock lost more than 8% in Monday trading.
How bad were they?
They weren't all that bad. In fact, they were record-setting, with total production of 365,923, up 54% over Q3 2021. And Tesla delivered 343,830 vehicles over the three-month period, a 42% increase from a year ago. Deliveries of the Model S and X – its two older models – more than doubled on a year-over-year (YoY) basis to 18,672. The newer Model 3 and Y had collective deliveries of 325,158.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
That last figure appears to be the fly-in-the-ointment for investors. Although the Model 3 and Model Y deliveries increased 40% YoY, they jumped 87% in Q3 2021. That suggests these two electric vehicle (EV) models are experiencing decelerating sales.
What Tesla's Q3 Numbers Mean for EV Sales
Investors could be wondering what Tesla's latest production and delivery numbers mean for the entire EV market.
Analysts expected Tesla to deliver between 14,000 and 15,000 more EVs than it did in the third quarter. That's a 4.2% miss on the consensus estimate.
However, the fact Tesla didn't deliver all the vehicles it produced in the quarter – a 22,093 shortfall – suggests sales in China were softer than expected, forcing the company to send some of the EVs produced at its Shanghai factory to Europe and the U.S.
Investors who were expecting Chinese sales to be stronger are now left wondering if Tesla's miss will be a familiar tune across all EV stocks? Or is this merely a blip in Elon Musk's quest to sell more electric cars than anyone else.
Tesla is Confident About a Q4 Rebound
TSLA's delivery-to-production shortfall is likely a one-time affair rather than the start of an ugly trend. The company expects its fourth-quarter production to jump dramatically and continue into next year amid solid increases in output at its two newer assembly lines in Texas and Germany.
Tesla still feels it can grow deliveries by 50% in 2022 despite lingering supply-chain issues. Through the first nine months, it produced 929,910 electric vehicles. Its internal projection for fourth-quarter production of its two newer products is 495,000, or approximately 95% overall. It believes that it can produce 40,000 EVs per week by the end of 2022.
If it does meet this fourth-quarter goal, it will produce more than 1.4 million EVs worldwide in 2022. Its internal projections also put it on course to produce 2.1 million EVs in 2023.
CFRA Research analyst Garrett Nelson discussed Tesla's latest production numbers in an Oct. 3 note to clients. He has Strong Buy rating and a $400 price target on TSLA stock.
"While shares could trade lower on Monday, we continue to view TSLA as one of the market's most compelling earnings growth stories,” Nelson stated in his note.
UBS analysts believe that the Tesla is best positioned to be able to lower prices in 2023 to ensure its increased production capacity is fully utilized. And it can do this while maintaining its healthy 30% auto gross margins.
If there's an industry slowdown, Tesla didn't get the memo. It appears to be in excellent shape heading into the final quarter of 2022 and beyond.
-
The Economy on a Knife's EdgeThe Letter GDP is growing, but employers have all but stopped hiring as they watch how the trade war plays out.
-
Why the Ultra-Rich Still Lose Sleep Over MoneyA look inside the lesser-known financial anxieties of ultra-high-net-worth individuals — and what those fears reveal about markets, policy, and wealth strategy.
-
Dow Dives 878 Points on Trump's China Warning: Stock Market TodayThe main indexes erased early gains after President Trump said China is becoming "hostile" and threatened to cancel a meeting with President Xi.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have TodayBank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have TodayORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
Stocks Rise to Start Fed Week: Stock Market TodayThe Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
-
Markets Prepare for August Inflation Data: Stock Market TodayApple CEO Tim Cook is still important, but price action this week is as much about incoming inflation data ahead of next week's Fed meeting.
-
Stocks Slip as Job Growth Stalls: Stock Market TodayThe August jobs report came in much weaker than expected, while the unemployment rate ticked higher.
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have TodayUNH stock was a massive market beater for ages — until it wasn't.
