Big factories big trucks and big musk Tesla Q4 earnings

Big factories, big trucks and big musk: Tesla Q4 earnings expectations

Tesla’s fourth-quarter and full-year 2022 results are ahead of us, and with them Wall Street’s expectations for the electric-vehicle maker to post quarterly revenue of $24.03 billion and adjusted earnings per month, according to Yahoo Finance data Share will reach around $1.13. If Tesla achieves this sales estimate, it will mean a record for the company, but also the slowest pace of growth since mid-2020.

As usual, Tesla will report its results Wednesday after the market close, and management will discuss the results and answer questions from analysts during a webcast taking place at 5:30 p.m. ET.

The automaker is ending a tumultuous year in which its stock price has fallen 65% on factors ranging from CEO Elon Musk’s distraction with Twitter to fears of a slowdown in sales in a pandemic-hit China. Tesla is expected to address those concerns, as well as recent vehicle price cuts and missed fourth-quarter delivery estimates, during tomorrow’s call.

In fact, so much has happened in Tesla land over the past few months that Dan Ives, a managing director at Wedbush Securities, said the upcoming conference call and guidance comment will be “one of the most important moments in Tesla history” for Musk even.”

Before we dive into our expectations for the conference call, it’s worth pointing out that Tesla stock closed at $143.89 on Tuesday and is up more than 30% since the start of this month, after surging two-thirds of its peak since April 2022 had lost value.

An appearance by Musk

Musk doesn’t always participate in Tesla’s earnings calls — and is currently busy defending himself in court against claims he defrauded investors with his infamous “funding secured” tweet from 2018 — but the CEO is expected to appear tomorrow, if only for that The investor fears he’s not paying enough attention to Tesla since taking over Twitter.

The executive also went to court in November to defend his $56 billion Tesla pay package after a shareholder filed a lawsuit to reverse the deal, which he says was wrongly awarded to Musk, a ” Part-time CEO” was awarded.

Missed Delivery Estimates

During Tesla’s third-quarter earnings call, Musk promised that Tesla would deliver an “epic year-end.” The automaker set record sales and vehicle deliveries, but still missed its own and Wall Street’s estimates. Fueled in part by last-minute Model Y and 3 vehicle sales in December, Tesla delivered 405,278 vehicles in the fourth quarter. The street had expected delivery of 420,000 to 425,000 units.

Analysts are likely to question the company on its failures, as the fourth quarter marked the third straight quarter in which the automaker didn’t deliver as many deliveries as promised. Tesla could be asked to provide more realistic estimates for 2023.

We may also see updated fourth-quarter shipments and sales figures when the results are released.

Margins on vehicle price reductions

Earlier this month, Tesla lowered the price of its Model Y long-haul crossover (20% to $52,990) and Model 3 sedan (14% to $53,990) for US buyers. The vehicles’ new, lower base price qualifies them for the $7,500 federal tax credit under the Inflation Reduction Act (IRA), which was signed into law in August. Under the terms of the IRA, the threshold is $55,000 for electric sedans and $80,000 for SUVs, pickups and vans.

Tesla also lowered the prices of its Model S and Model X sedans, which are still too expensive to qualify for the EV tax credit.

The recent price cuts mark at least the fourth time the automaker has discounted its vehicles or offered loans in the past few months. Tesla announced price cuts in China of up to 9% for the Model 3 and Model Y in October, and cut prices another nearly 14% earlier this month. The company initially issued a $3,750 rebate on Model Ys and 3s in the U.S. and Canada in early December before increasing it to $7,500 later in the month.

Investors didn’t take the price cuts well, fearing it would signal a drop in demand for the iconic electric vehicles. However, the price cuts seem to have actually boosted demand for the vehicles. What investors are hoping to gauge is whether the price cuts have hurt Tesla’s margins too much. It might be too early to give those answers, but Tesla will likely provide some clues.

Updates on new gigafactories

Tesla on Tuesday announced plans to invest an additional $3.6 billion in its Nevada Gigafactory, adding two new facilities for building battery cells and Tesla Semis. The automaker could discuss these plans further, for example if it hopes to ground the facilities and start production.

The automaker has said it has a multi-year plan to increase production by 50%, so analysts will want to hear about other new gigafactories. There have been reports that Tesla is planning a $10 billion gigafactory in Mexico, and the company is close to a deal to build factories in Indonesia.

More about semi and cyber trucks

Tesla finally unveiled its first production versions of the long-delayed electric semi in December, delivering the first examples of Pepsi’s order of 100 trucks, which the company ordered back in 2017. A number of high profile companies including Anheuser-Busch, Pepsi, Walmart and UPS have also reserved Semis so we may have some updates on production and when these companies can expect shipments.

Tesla’s Cybertruck has also suffered multiple delays, but Musk said in July that the company was on track to launch the truck around mid-year. We expect more updates on timing as well as new features. In September, Musk said the Cybertruck was “waterproof enough to serve as a boat for a short time.”