Electric car manufacturer You’re here (NASDAQ: TSLA) is set to report deliveries for its fourth quarter early next week. The company typically reports quarterly deliveries a few days after the end of the calendar quarter, so Tesla will provide an update on fourth quarter deliveries on Monday.
With Tesla shareholders battered and bruised this year, next week’s report is likely to get a lot of attention. Will the figures in the report raise even more concerns? Or could they help alleviate some of the suffering endured by shareholders?
Tesla stock is down more than 68% year-to-date at the time of this writing, leaving many investors wondering just how low the growth stock might drop.
A record quarter is likely
Despite all the pessimism around Tesla stock, the company is expected to deliver a record number of vehicles in the fourth quarter. Consensus analysts’ current estimate calls for a record 425,000 deliveries for the period, up from the company’s previous quarterly record (set in the third quarter) of 343,830.
Highlighting the electric car business’ strong growth trajectory, deliveries at this volume would result in approximately 24% sequential growth and 38% year-over-year growth.
Why shareholders care
While Q4 shipments around this level may be good news for investors, it may not be enough to allay their concerns. Concerns about Tesla are more focused on what the company can accomplish in 2023, so any comments in next week’s update on demand or expectations for delivery volumes in the first quarter or for the full year 2023 will likely be more important to shareholders than fourth quarter delivery numbers. . Unfortunately, however, Tesla’s end-of-quarter production and delivery updates typically don’t provide any forecasts.
Several things worry Tesla investors about expectations for 2023. First, the China-based electric car company Nio recently lowered its fourth-quarter shipment forecast by about 9%, citing the impact of a growing number of coronavirus cases in major cities across China. This has given Tesla investors more reason to worry about sales developments in China.
Another sign of a potential drop in demand in China has been reports that Tesla has cut production at its Shanghai factory. Finally, Tesla’s recent decision to cut prices for its Model 3 and Model Y vehicles in the United States has also raised concerns about demand for its vehicles.
Some of these recent headlines are certainly concerning. However, it is extremely difficult to predict whether some of these issues are only short-lived as the company attempts to address temporary challenges or whether they indicate issues that may persist throughout 2023.
While Tesla’s reported deliveries next week will be a useful data point for investors, the company may need to provide more information before shareholders can get a better idea of what to expect from the company. in the future. To that end, investors are hoping for comments from management that they are optimistic about continued strong shipment growth in 2023.
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Daniel Sparks has no position in the stocks mentioned. Its clients may hold shares of the companies mentioned. The Motley Fool holds positions and recommends Nio and Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.