Tesla shares tumble more than 12% following deliveries report

Shares of Tesla closed down 12% on Tuesday, a day after the electric auto maker reported fourth-quarter vehicle production and delivery numbers for 2022 that fell shy of analysts’ expectations and the company’s stated goals.

Deliveries are the closest approximation of sales disclosed by Tesla. The company reported 405,278 total deliveries for the quarter and 1.31 million total deliveries for the year. The full year numbers represented a record for the Elon Musk-led automaker and growth of 40% in deliveries compared to 2021.

But according to a consensus of analysts’ estimates compiled by FactSet, as of Dec. 31, 2022, Wall Street was expecting Tesla to report around 427,000 deliveries for the final quarter of the year. Estimates updated in December, and included in the FactSet consensus, ranged from 409,000 to 433,000.

Shares of Tesla suffered a yearlong sell-off in 2022, prompting CEO Musk to tell employees in late December not to be “too bothered by stock market craziness.”

Musk has blamed Tesla’s declining share price in part on rising interest rates. But critics point to his rocky $44 billion Twitter takeover as another big culprit. Musk sold tens of billions of dollars of his Tesla shares last year, in part, to finance the leveraged buyout.

Some Wall Street analysts think that Tesla’s deliveries miss, which followed aggressive discounting by Tesla in China and the US, spells trouble for the electric vehicle maker, but others see a buying opportunity.

Toni Sacconaghi at Bernstein sees Tesla “facing a significant demand problem,” in 2023.

He wrote in a note on Monday, “Tesla’s annual order run rate in Q4 including significant discounting was only about 1M units, and the company’s target is to sell close to 2M units in 2023. We expect demand challenges persisting in 2023.” He noted that no Tesla models appear to currently qualify for any Inflation Reduction Act rebates except the 7-seat version of the company’s Model Y. The 7-seat option costs about $3000.

He added, “We believe Tesla will need to either reduce its growth targets (and run its factories below capacity) or sustain and potentially increase price cuts globally, pressuring margins.”

Analysts at Goldman Sachs said they consider the delivery report to be an “incremental negative,” and view Tesla as a company that is “well positioned for long-term growth.” Goldman reiterated its buy rating on the stock in a Monday note and said that making vehicles more affordable in a challenging macroeconomic environment will be a “key driver of growth.”

“We believe key debates from here will be on whether vehicle deliveries can reaccelerate, margins and Tesla’s brand,” the analysts said.

But Baird analyst Ben Kallo, who recently named Tesla a top pick for 2023, maintained an outperform rating and said he would remain a buyer of the stock ahead of the company’s earnings report, which is scheduled for Jan. 25.

“Q4 deliveries missed consensus but beat our estimates,” he said in a Tuesday note. “Importantly, production increased ~20% q/q which we expect to continue into 2023 as gigafactories in Berlin and Austin continue to ramp.”

Morgan Stanley analysts said they think Tesla share price weakness is a “window of opportunity to buy.”

“Between a worsening macro backdrop, record high unaffordability, and increasing competition, there are hurdles for all auto companies to overcome in the year ahead,” they said in a note Tuesday. “However, within this backdrop we believe TSLA has the potential to widen its lead in the EV race, as it leverages its cost and scale advantages to further itself from the competition.”

— CNBC’s Lora Kolodny and Michael Bloom contributed to this report.