Tesla deliveries to fall short of Elon Musk's 2023 goal
Tesla is anticipated to announce a record-breaking quarter for electric vehicle (EV) deliveries, although it may not help CEO Elon Musk's ambitious goal of two million vehicles per year. Experts estimate that Tesla delivered 1.82 million vehicles worldwide in 2023, a 37% increase from the previous year. Senior analyst at CFRA, Garrett Nelson, stated, "The fourth quarter is typically the strongest of the year in terms of deliveries for Tesla, we're expecting that to be the case again this year."
Price cuts and market share loss in China
To counteract declining sales, Tesla reduced prices for its four car models worldwide in 2023, particularly targeting China where it faced competition from local companies like BYD. This price war and a decrease in EV demand have caused other car manufacturers, such as Ford Motor, to scale back their electrification plans. As a result, Tesla has solidified its position as the leading EV company in the US, and its stock has more than doubled this year.
Challenges ahead in 2024
In 2024, Tesla will lose federal tax credits for some of its cars in the US and also in Germany, where the government is ending its EV subsidy program early. As a result, Tesla will be pressured to reduce the prices to keep the vehicles within customers' budgets. Daiwa Capital Markets's analyst Jairam Nathan, lowered his estimate for Tesla's 2024 deliveries to 2.04 million from 2.14 million and projected a 4% decline in average revenue per car compared to 2023.
Cybertruck production and regulatory scrutiny
Tesla also faces increased regulatory scrutiny regarding its self-driving systems and other components in the US and some European countries. Earlier this month, Tesla recalled nearly all of its two million vehicles on US roads to install new safeguards. Tom Narayan, an analyst at RBC Capital Markets, said in a report that the Cybertruck would account for 3% of Tesla's volumes in 2024, describing it as more of a "halo" product that could attract consumers to the brand.
