Investor's Corner
Tesla Q3 deliveries: analysts react to delivery miss and 1.8 million unit forecast
Tesla (NASDAQ: TSLA) released its Q3 2023 delivery figures today, showing it delivered 435,039 units while producing 430,488. Analysts are reacting to the miss as Wall Street recently cut their predictions of what Tesla would report due to planned production stoppages as plants were shut down throughout the quarter to make way for plant upgrades.
Wall Street consensus estimates slated the delivery numbers at around 455,000 units. Tesla posted numbers that represented a 7 percent reduction from Q2 but a 27 percent growth compared to Q3 2022.
Tesla (TSLA) releases Q3 2023 delivery and production results: 435k delivered and 430k produced
Despite the miss by 20,000 units, Tesla stated in its press release announcing the delivery figures that it would maintain its 1.8 million-unit delivery goal for the full year, which is a key indication that the automaker is prepared for a sizeable push that will help it attain the largest single quarter in terms of deliveries in company history.
Currently, Tesla has 1,324,074 cars delivered for the year, already surpassing its delivery count for 2022. Tesla needs just under 500,000 cars delivered during the final quarter of 2023 to meet its delivery goal, and if upgraded lines, along with new Model 3 Highland deliveries in Europe and Asia and initial Cybertruck deliveries, all go according to plan, a substantial increase in delivery volume could be possible.
However, analysts are giving their two cents on what happened with Tesla’s Q3 numbers, and while they were lackluster due to the line upgrades.
Wedbush analyst Dan Ives put a note out to investors this morning stating that, while the delivery miss is definitely disappointing, there is a light at the end of the tunnel:
“This morning, Tesla announced its 3Q delivery numbers, which came in below the Street’s targets with the longer than expected downtimes of factories in Shanghai and Austin causing likely ~20k units to shift into 4Q based on our estimates. Even when factoring in the shutdowns with no rose-colored glasses, Tesla clearly missed Street estimates this quarter with bulls left disappointed, although we see better days ahead for 4Q and 2024.”
Ives believes that Tesla still has room to hit its stride and ramp production and deliveries through a series of new demand triggers, which include Cybertruck and Model 3 Highland.
“…we believe Tesla is now set to be entering the next stage of growth for the company globally with the Model 3 refresh front and center in China and Cybertruck production set to kick off beginning around Halloween. Tesla remains committed to the 1.8 million deliveries for the year, with a strong 4Q needed to hit this number. The company will report its 3Q earnings on October 18th after the bell.”
Ives admits there “was nothing to write home about” with this delivery report from Tesla, but there are certainly factors leading to what could be the company’s best quarter and year in the forefront.
Ives maintains the ‘Outperform’ rating on Tesla with a $350 price target.
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Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
Tesla is not sparing any expense in ensuring the Cybercab is safe
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