Several Wall Street analysts cautioned in the lead-up to the report that could come as early as Sunday that Tesla may miss projections for third-quarter deliveries owing to planned manufacturing shutdowns and lacklustre demand that caused the automaker to hike discounts.
Brokerages such as Barclays, Baird, and Guggenheim attributed the probable weakness to downtime at the automaker's plants in Europe and China for equipment upgrades and preparation for the manufacturing of the Cybertruck and the upgraded Model 3 sedan.
However, the retooling might support a good fourth quarter by enabling Tesla to update its outdated vehicle lineup with models that could more effectively compete with those from American rivals like Ford and BYD in China, according to the brokerages.
In the September quarter, they predict Tesla to deliver 439,200 to 455,000 units. According to an average of 11 analysts' forecasts gathered by LSEG, that is less than the general Wall Street projection of 458,713 automobiles.
The LSEG statistic suggests that deliveries decreased by 1.6% over the prior quarter. Since the second quarter of 2022, that would be Tesla's first consecutive delivery fall.
A negative report, according to some analysts, may necessitate further price reductions to boost sales in the face of increased competition and a general downturn in demand for electric vehicles.
"It's not just supply issues, demand signals remain weak," brokerage Guggenheim said in a note this week. "We would expect price cuts to be needed in future quarters."
That would be at the expense of Tesla's market-leading margins, which fell to a four-year low in the second quarter as a result of the company's price battle that it began in January.
In the third quarter, Tesla slashed prices of its Model S and Model X by 14% to 21% in main markets China and the U.S. Additionally, it increased discounts on its popular Model 3 and Model Y up to $5,000 in the US, while lowering Model Y prices and providing other incentives in China.
According to a Business Insider story, the corporation reportedly reduced its output forecast at its German factory due to weak demand.
According to some analysts, the revised Model 3 could help Tesla recover in the final three months of the year. The redesigned version will cost more and go on sale in the fourth quarter in Europe and China.
"Early reviews of the refreshed Model 3 have been positive and changes in wait times suggest that demand is strong, particularly in China," Baird said. "The updates will provide a boost to demand during the challenging environment."
In light of the Detroit Three autoworkers' strike, some investors are also hopeful about Tesla's future.
The Ford, General Motors, and Stellantis workers' strike is now halfway through its third week, and any price hike resulting from a prospective new deal with the United Auto Workers union will put more pressure on the traditional automakers at a time when they are already losing billions of dollars on their EV companies.
"You really don't want to put your money in Ford or GM right now, and for many U.S. investors, Tesla is the only other game in town," said Thomas Martin senior portfolio manager at Globalt Investments, which holds Tesla shares.
"So that should put a floor underneath the stock somewhere."
This month, Tesla stock has decreased by around 5% due to delivery delay expectations. But for the year, they have almost doubled.
(Source:www.saltwire.com)
Brokerages such as Barclays, Baird, and Guggenheim attributed the probable weakness to downtime at the automaker's plants in Europe and China for equipment upgrades and preparation for the manufacturing of the Cybertruck and the upgraded Model 3 sedan.
However, the retooling might support a good fourth quarter by enabling Tesla to update its outdated vehicle lineup with models that could more effectively compete with those from American rivals like Ford and BYD in China, according to the brokerages.
In the September quarter, they predict Tesla to deliver 439,200 to 455,000 units. According to an average of 11 analysts' forecasts gathered by LSEG, that is less than the general Wall Street projection of 458,713 automobiles.
The LSEG statistic suggests that deliveries decreased by 1.6% over the prior quarter. Since the second quarter of 2022, that would be Tesla's first consecutive delivery fall.
A negative report, according to some analysts, may necessitate further price reductions to boost sales in the face of increased competition and a general downturn in demand for electric vehicles.
"It's not just supply issues, demand signals remain weak," brokerage Guggenheim said in a note this week. "We would expect price cuts to be needed in future quarters."
That would be at the expense of Tesla's market-leading margins, which fell to a four-year low in the second quarter as a result of the company's price battle that it began in January.
In the third quarter, Tesla slashed prices of its Model S and Model X by 14% to 21% in main markets China and the U.S. Additionally, it increased discounts on its popular Model 3 and Model Y up to $5,000 in the US, while lowering Model Y prices and providing other incentives in China.
According to a Business Insider story, the corporation reportedly reduced its output forecast at its German factory due to weak demand.
According to some analysts, the revised Model 3 could help Tesla recover in the final three months of the year. The redesigned version will cost more and go on sale in the fourth quarter in Europe and China.
"Early reviews of the refreshed Model 3 have been positive and changes in wait times suggest that demand is strong, particularly in China," Baird said. "The updates will provide a boost to demand during the challenging environment."
In light of the Detroit Three autoworkers' strike, some investors are also hopeful about Tesla's future.
The Ford, General Motors, and Stellantis workers' strike is now halfway through its third week, and any price hike resulting from a prospective new deal with the United Auto Workers union will put more pressure on the traditional automakers at a time when they are already losing billions of dollars on their EV companies.
"You really don't want to put your money in Ford or GM right now, and for many U.S. investors, Tesla is the only other game in town," said Thomas Martin senior portfolio manager at Globalt Investments, which holds Tesla shares.
"So that should put a floor underneath the stock somewhere."
This month, Tesla stock has decreased by around 5% due to delivery delay expectations. But for the year, they have almost doubled.
(Source:www.saltwire.com)