Leading electric vehicle maker Tesla (NASDAQ:TSLA) delivered 405,278 vehicles in the fourth quarter of 2022. While the company’s Q4 deliveries increased 31.3% year-over-year, it lagged analysts’ consensus estimate of 427,000 units. Tesla faced COVID-related production disruptions, macro pressures, and slowing demand in China amid growing fears of an economic downturn and rising competition. The company produced 439,701 vehicles in Q4.
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Tesla Facing Multiple Headwinds
Overall, Tesla’s deliveries increased 40.3% to 1,313,851 vehicles in 2022, while production grew 47% to 1,369,611 vehicles. The company missed its annual production as well as deliveries target. During its Q3 earnings call, Tesla stated that it was on track to reach its 50% annual production growth target. However, the company cautioned that it expects its 2022 deliveries to be just under 50% growth due to an increase in the number of cars in transit at the end of the year.
Tesla slashed its prices and offered various incentives to boost demand and clear its inventories. Aside from macro pressures, the company is facing growing competition from legacy automakers Ford (F) and General Motors (GM), and emerging players like Rivian (RIVN) in the U.S. market. Meanwhile, it is competing with Nio (NIO), XPeng (XPEV), Li Auto (LI), and BYD (BYDDY) in China, the largest EV market.
2022 turned out to be a big disappointment for Tesla investors, with the stock falling 65%. Tesla investors and analysts, including several bulls, have been irked by CEO Elon Musk’s growing focus on Twitter at the cost of Tesla.
Separately, Reuters reported that Tesla’s vice president for Greater China Tom Zhu has been promoted to oversee the company’s U.S. assembly plants as well as sales operations in North America and Europe. Zhu will retain the title of vice president for Greater China and also his duties as Tesla’s most senior executive for sales in the rest of Asia. It is worth noting that with this promotion, Zhu becomes a key executive at Tesla, with direct responsibilities for deliveries and production in major markets.
What is the Target Price for Tesla Stock?
Wall Street is cautiously optimistic about Tesla stock, with a Moderate Buy consensus rating based on 18 Buys, 10 Holds, and two Sells. The average TSLA stock price target of $262.81 implies 113.3% upside potential.
