Why do the production figures, up 40%, fail to convince analysts?

Tesla has just published its production figures for Q4 2022 and for the year 2022. The manufacturer has accustomed its investors to record production figures, which has caused a rather incredible situation at the end of the year. Will the manufacturer’s objectives be revised downwards?

Tesla produced 439,701 cars in the fourth quarter of 2022 and delivered 405,278

Source Tesla Investor Relations website

These figures are published by You’re here. We invite you to consult the data to enrich your analyzes and form your opinion.

Can these figures justify such a drop in the share price? This is not our topic of the day. Indeed, the stock market is a world apart that is based on principles that are often divorced from the realities noted by the main global analysts.

In effect, in the case of Tesla, the movements are very complex to analyze; it is true that the share price represents an overall confidence index. So, is confidence in Tesla crumbling?

This is what analysts like Bernstein think, taken up in an article by Market watch. They write: “We believe most investors underestimate the magnitude of the demand issues Tesla faces. 2023/2024 could put an end to unrealistic expectations”.

I clearly don’t think so, but some investors believed that Tesla could, in the long term, free itself from the macro-economic constraints that impact all sectors. It is not and never has been.

Factually, here’s the performance of automaker Tesla: 405,278 cars were delivered in the last three months of the year, up 31.3% from the same period a year earlier, while the company produced 439,701 cars. For the full year, Tesla delivered 1.31 million cars, up about 40% from 2021, while the company produced about 1.37 million vehicles

Tesla managers are still communicating on a 50% growth in deliveries in 2023. In 2022, this objective was only achieved in Q4. It was therefore very difficult to achieve this same objective over the entire year. However 2023 should be the year of Tesla Semi and Cybertruck.

New production lines in 2023

Despite these analyses, Tesla management should maintain its target of 50% growth in 2023 because there will be new products that should help achieve it.

In the United States, the Cybertruck is a product that is announced as having to be a big hit. With a futuristic design and a use designed for the American Dream, reservations are already relayed as very important. The challenge for the manufacturer will be to ensure deliveries when the production lines are new and the product has not yet left the production lines.

Since the end of 2022, according to certain sources close to the Gigafactories, the teams have been working on the assembly of the Cybertruck. The product crystallizes all hopes.

A real expectation for the Tesla Model 2

As you have understood, analysts no longer look so much at Tesla’s strengths but challenge the start-up on its weak points. Between us, it’s a great way to stimulate the creativity of the builder.

Tesla remains the manufacturer with the best profitability after Ferrari. This element should be enough to convince the most skeptical analysts, but the market seems focused on volume.

Will 2023 be the year the Tesla Model Q is announced?

Tesla Model 2 or Tesla Model Q, that’s not really the question. In view of the EV competition and the criticisms that target electric vehicles. It seems obvious to some analysts that the manufacturer needs a really cheaper product to convince the popular classes.

The future will tell us if 2023 will be the year of the announcement of this next mass-market vehicle almost promised by management. We clearly lack elements to conclude on this subject, but we await the next communications to continue the analyses.

The point to monitor is essentially the production target which will be announced by management at the start of the year. If it is maintained, it would announce that the production of the Cybertruck is in very good progress. If this target of 50% growth in deliveries in 2023 is lowered, that would mean thatElon Musk will have to plan a solid action plan.

Why do the production figures, up 40%, fail to convince analysts?