Austin-based automaker Tesla found itself in a situation of good and bad news this week.
On the positive side, the company has released production and shipment data for 2020 and says it sold a record 1.3 million vehicles last year.
But on the other hand, those sales numbers fell short of Tesla’s growth goals, as CEO Elon Musk said his goal is to increase the company’s sales by 50% almost every year.
Meanwhile, Tesla shares continue to fall: over the past year, they have fallen more than 65%, causing Musk to lose his first place in the ranking of the richest people in the world, according to Forbes. The company’s stock decline in 2022 was the worst on record and more than three times the fall of the S&P 500 overall stock index, which fell 19.4%.
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Dan Ives, industry analyst at Wedbush Securities, said Tesla’s numbers are “nothing to talk about” and missing its annual growth target remains a challenge as Tesla heads into a “very cloudy 2023.”
“On the one hand, in this softer macro, with automakers scrambling for supply/demand, these numbers broadly paint a picture of a company growing rapidly on the EV front and still at the start of a major growth cycle.” Ives said in a note to clients. “However, Tesla is holding to a higher standard and a miss is a miss and the bulls aren’t slamming champagne on those numbers and now the big question is about the 2023 supply/demand picture.”
Tesla’s 2022 sales surpassed the previous record of 936,000 vehicles delivered in 2021, but fell short of the 1.4 million needed to meet the company’s 50% growth goal. Sales were up 40% year-over-year and production increased 47% to 1.37 million.
“Cinderella’s trip is over”
Tesla didn’t release new models last year and is facing increasing competition from legacy automakers and startups like Lucid and Rivian that are constantly introducing new electric vehicles. But Musk has promised to begin production this year of the long-awaited Cybertruck electric pickup truck, which is expected to be built in Austin. The company has also started deliveries of its electric semi-trailers.
Musk tweeted on December 30 that the company’s long-term fundamentals are strong, but “short-term market frenzy” is unpredictable.
Musk’s $44 billion purchase of social media platform Twitter and the time he spent on the venture also left investors worried that Twitter was distracting Musk from Tesla’s operations. Musk said last month that he plans to remain CEO of Twitter until he finds someone willing to replace him in the post. The billionaire also floated the idea of opening a second headquarters for the social media company in Texas.
Ives said demand for Tesla overall is starting to slow down and said the company will likely need to adjust and lower prices, especially in China, a key region for the company’s growth. But Tesla shares have been hit by a lot of bad news in recent months, and investors likely think the latest shipment data “could have been worse,” he said.
“Tesla’s Cinderella ride has come to an end, and Musk now needs to guide the company through this grim Category 5 macroeconomic storm instead of focusing on his new golden brainchild of Twitter, which we believe continues to be a distraction and looms over Tesla history and stock,” Ives. said.
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Scale up in Austin
Tesla continues to ramp up production at its $1.1 billion manufacturing facility in Central Texas called Giga Texas, which opened in April.
In late 2021, the company announced that it would be moving its headquarters to Austin, and it is now based outside of its Austin manufacturing facility. Austin is expected to play a key role in the future of the company.
The Austin plant began delivering cars in April, but it’s unclear what impact it’s having on Tesla’s numbers. In the third quarter, Tesla said the facility was capable of producing less than 250,000 Model Y SUVs and was gearing up for production of the Cybertruck. In December, the company reached a capacity of 3,000 vehicles per week. The facility is also expected to produce Model 3s as well as car batteries and is expected to employ over 10,000 workers by the end of 2022.
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The company’s 2022 sales fell short of Musk’s stated sales target, despite year-end sales growth that included rare $7,500 U.S. discounts on Model Y and Model 3 vehicles, the company’s best-selling offerings. Discounts offered over the last two weeks of the year have raised questions about whether demand for Tesla products is declining as the Federal Reserve raised interest rates to fight inflation.
Tesla has also had to deal with a rising number of COVID-19 cases in China, which has led to production cuts at its Shanghai plant. With an additional push from the US, Tesla delivered more than 405,000 vehicles worldwide in the fourth quarter. But this did not match Wall Street’s forecasts. Analysts polled by data provider FactSet expected 427,000 shipments from October to December and 1.33 million for the full year.
“Thank you to all of our customers, employees, suppliers, shareholders and supporters who helped us achieve a great 2022 in light of the significant COVID and supply chain challenges throughout the year,” the electric vehicle and solar panel company said in a written letter. statement.
Additional material from the Associated Press.
