Tesla Analysts Call Deliveries Beat A 'Major Achievement,' But One Bear Points Out Red Flags

Tesla, Inc. TSLA reported Tuesday above-consensus deliveries for the fourth quarter (Q4) and, in the process, reached its annual goal.

Analysts were generally upbeat about the numbers.

Ives Lauds ‘Major Achievement:’ Tesla’s Q4 deliveries of 484,507 units exceeded the Street estimate of 480,000 units and the whisper number of 478,000 units, Wedbush analyst Daniel Ives said in a note.

Production came in at 495,000 units, in line with Wedbush’s estimate but below the 500,000-plus units forecast by some, he said.

The production shortfall versus the expectations of some analysts reflected strong inventory control during the quarter, the analyst said.

Model 3 and Y deliveries were strong at 477,000 units, with China a “clear area of success” he said.

“This was an important quarter for Tesla to show strong deliveries with clear momentum into 2024 as demand has upticked since 3Q based on all our global checks,” Ives said.

“This was a clear win for Musk and Tesla as hitting 1.8 million vehicles for 23 was a major achievement with nice momentum into 24. Big year ahead for TSLA,” the analyst said.

Ives maintained an Outperform rating and $350 price target for Tesla stock.

See Also: Everything You Need To Know About Tesla Stock

Black, Munster Look Ahead: Fund manager Gary Black said the fourth-quarter deliveries would have exceeded 490,000 units if a boat with 5,000 to 6,000 units weren’t turned back from Australia because of a stink bug infestation in the quarter.

Tesla clubbed Cybertrucks under “Other Models,” along with Model S and X vehicles, Black said. Investors may wait until the fourth-quarter earnings report to get an ideas regarding the core gross margin and 2024 deliveries guidance, he said. The Street is currently modeling core auto gross margins of 17.1% and 2024 deliveries of 2.2 million units, he noted.

“Investors also want to see what pricing actions are taken to re-align the US pricing matrix, which remains distorted due to removal of the $7,500 EV credit on M-3 RWD and M-3 LR,” he added.

Deepwater Asset Management Managing Partner Gene Munster said he now expects core margins to be at 16.5%, essentially in line with the September quarter’s 16.3%, given deliveries were only slightly ahead of expectations.

“Stable margins should be viewed as slight positive by investors given it would mark an end the margin slide over the past year and half when they peaked at 29% in Mar-22,” he said.

Munster expects Tesla to achieve the consensus delivery growth forecast of 17% for 2024, which will likely help the company maintain its U.S. market share. The current year, the venture capitalist said, will mark a trough in U.S. EV market, he said.

Bear Sees End Of Growth Story: Tesla bear Gordon Johnson said in a social media post that the Tesla “growth story is officially over.” The 20% year-over-year deliveries growth in Q4 marked the lowest since the second quarter of 2020, coinciding with the height of the pandemic, he said.

He flagged the $450 million cash burn from inventory build and production outpacing sales for six out of the last seven quarters as red flags.

The analyst also noted that Warren Buffett-backed BYD Co. Ltd. BYDDY BYDDF sold more battery EVs than Tesla in Q4. Additionally, some Tesla models lost a full tax credit beginning Jan. 1, he added.

Tesla last traded up 0.58% at $249.91 on Tuesday, according to Benzinga Pro data.

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