Tesla Reports Solid China Sales Numbers for December; Shares Up

One of the most popular EV stocks Tesla, Inc. (TSLA) reported solid delivery numbers for December 2021 in China. Following the news, shares rose as much as 1.7% and ended the day at $1,064.40 on January 11.

Tesla China December Deliveries

According to the China Passenger Car Association (CPCA), Tesla China delivered a total of 70,847 electric vehicles (EV), a massive year-over-year growth of 197.6% and a solid 34% sequential growth.

Out of the total cars delivered, 70,602 cars were delivered locally and only 245 cars were delivered internationally. In November 2021, Tesla China reported wholesale numbers totaling 52,859 autos, which in itself is a massive feat.

If the raw production numbers were anywhere close to the wholesale numbers, it would translate into an annual run rate of more than 800,000 autos even before 2021 ended.

Domestic V/S International Deliveries

A look at the domestic and international breakup of Tesla China deliveries shows that the company typically focuses on export deliveries in the first half of every quarter and stresses the importance of local deliveries during the latter half.

Going by numbers reported in the fourth quarter, in October, Tesla China delivered a little more than 13,000 local vehicles and in November, the company sold around 31,700 local vehicles. Following the upward trend, in December, Tesla China sold 70,602 vehicles locally.

This also means that Tesla China hasn’t been able to focus entirely on the domestic Chinese market, which is witnessing a burgeoning demand for electric vehicles amid shifting preferences towards green energy and environment-friendly initiatives.

Despite the global chip shortages and supply chain issues, Tesla China managed to deliver a total of 319,102 domestic vehicles in 2021. This number could grow even higher if the unit focuses more of its efforts on local demand.

Wall Street View

Yesterday, Morgan Stanley analyst Adam Jonas lifted the price target on the stock to $1,500 (40.9% upside potential) from $1,200, while maintaining a Buy rating.

Jonas is impressed by Tesla’s solid Q4 delivery numbers and sees it as a sign that the company is poised for more deliveries in 2022 and 2023. Furthermore, the analyst believes Tesla is well established to gain from its leadership position with Giga factories at Berlin and Austin, structural park, and introduction of new models all entering the narrative in 2022.

Overall, the stock has a Moderate Buy consensus rating based on 15 Buys, 9 Holds, and 6 Sells. The average Tesla price target of $1,039.70 implies 2.3% downside potential to current levels. Shares have gained 24.6% over the past year.

News Sentiment

TipRanks’ News Sentiment and Media Buzz Analysis shows the combined News Score based on TSLA’s News Sentiment and Media Buzz.

TipRanks data shows that the News Score for Tesla is currently Neutral based on 322 articles published over the past seven days. 78% of the articles have a Bullish Sentiment compared to a sector average of 63%, while 22% of the articles have a Bearish Sentiment compared to a sector average of 37%.

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