Tesla Stock Soars After Record Q4 Sales


Tesla Motor shares. | Image by Camilo Concha, Shutterstock

Tesla reported record fourth-quarter sales on Wednesday, giving Wall Street a peek at the demand concerns surrounding the company.

The Electric Vehicle-maker reported earnings per share of $1.19, beating analyst estimates by 6 cents. Revenues came in at a record $24.32 billion, topping analyst estimates by $160 million. The sales came even as the company’s vehicle delivery growth has slowed, according to The New York Times. The company’s stock soared higher following the earnings report, rising 11% on Thursday.

Tesla’s stock has fallen over 42% in the last year, but shares are up 48% year-to-date. Tesla’s stock has fallen sharply since CEO Elon Musk took over Twitter as investors have questioned Musk’s focus. The company has also faced higher interest rates, more competition in the EV space, and diminished brand popularity, according to The Wall Street Journal (WSJ).

In 2022, Tesla shares declined over 65%, causing its CEO to be the first person ever to lose over $200 billion in net worth, according to Bloomberg. In 2023, Tesla has already lowered vehicle prices by as much as 20% to create more demand, according to Reuters.

Musk indicated that he would be lowering prices late last year when he said on Twitter that the current landscape had forced the company to decide between revenue and earnings.

“My bias would be to say: Let’s grow as fast as we can without putting the company at risk,” he said.

The price cuts have angered some Tesla owners, with videos circulating the web of customers swarming its stores in China demanding refunds after the company announced it was slashing prices.

Last month, the company offered a $3,750 discount on its Model Y, bringing the price to $62,240 before upgrades, fees, and taxes. A base model Y now costs $53,490, according to Electrek.

“I just sort of feel like a pawn in their ‘let’s make the numbers’ game,” said John White, who purchased a Model Y after the $3,750 discount was announced.

The narrative around Tesla has changed dramatically since late last year. In October, Tesla was considering share buybacks of $5 billion to $10 billion, according to the WSJ. Since then, Musk said, “It wouldn’t be smart to do a buyback and then discover the recession is worse than 2009.”

Tesla’s company goal is to sell 20 million cars annually by 2030. If realized, it would make it the biggest car manufacturer in the world by volume, according to the WSJ. Currently, General Motors was the biggest automaker in the world by volume in 2022, overtaking Toyota, as reported by The Dallas Express.

Musk said to reach this target, the company will need around 12 factories. At the current pace, analysts expect the company to grow by 46% in 2023 to 1.91 million vehicle deliveries.

Tesla has been making one announcement after another in what is sure to be a hectic year for the company.

This week, Tesla announced a $3.6 billion plan to expand in Reno, Nevada, according to CNBC.

The expansion calls for two new factories to make battery cells and increase production of its semitrailer truck, which launched in December, three years later than expected, according to The Verge. Tesla has also announced plans to spend $776 million to expand its production facility in Austin, Texas, as reported by The Dallas Express. The expansion would bring Tesla’s footprint in Austin to 5.6 million square feet.

The company is expected to launch its highly anticipated, Cybertruck this year, according to Reuters.

Tesla’s earnings release came during the same week Elon Musk is in court for a federal trial regarding his 2018 tweet when he said he received funding to take Tesla private. The tweet cost Musk $20 million in fines and forced him to relinquish his Chairman role.

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