Tesla (TSLA.US) is expected to announce record quarterly deliveries in early January, but the company is grappling with inflation, rising interest rates, falling production and concerns about weak demand that may still struggle to satisfy investors. To clear inventory, Tesla is offering a rare $7,500 discount to U.S. customers who buy a Model 3 or Model Y, as well as 10,000 miles of free Supercharging.
Deliveries are one of the most closely watched metrics by investors, who are eager to see if Tesla can keep up its rapid growth. Global sales could reach 420,760 vehicles in the fourth quarter, according to 16 analysts, a forecast figure that (excluding some of the analysts’ recent projections) exceeds the record 343,830 vehicles delivered in the third quarter.
Tesla warned that it will achieve this goal in 2022, but Tesla may compromise on gross margins. Tesla has lowered prices on all its products in China and extended the shutdown of its Shanghai plant.
Last April, Elon Musk said that Tesla would produce more than 1.5 million cars by 2022. The company produced 929,910 vehicles in the first three quarters, so to achieve that goal it would need to produce more than 570,000 vehicles. In the third quarter, production exceeded deliveries by more than 22,000 vehicles, a gap that is likely to continue in the fourth quarter as cars remain in transit through the end of the year.
Robert W. Baird analyst Ben Kallo lowered his estimates for fourth-quarter and 2023 deliveries to account for the production slowdown and weakening macro environment. “I’m concerned about the general economic environment. Can people afford to buy $60,000 cars? That’s what the market is worried about.”
Tesla’s Model 3 and Model Y account for the vast majority of sales, and the company will announce global delivery and production totals within three days of the end of the fourth quarter. Tesla has had a practice of going all out at the end of the quarter, with all Tesla employees doing their best to deliver cars to customers. On the last earnings call, the company’s chief financial officer, Zachary Kirkhorn, said that one-third of third-quarter deliveries occurred in the last two weeks of the third quarter.
