There are almost always two distinct streams of thought around Tesla, one catering to the bullish point of view, while the other obsessed with seeing the EV giant floundering. These days, however, Tesla's detractors - colloquially known as TSLAQ - have quite a lot to say, courtesy of the less-than-stellar global macroeconomic backdrop and the attendant demand weakness that Tesla seems unable to shake off.
Like clockwork, about a week before quarter end $TSLA's sell side analysts start whacking estimates. pic.twitter.com/uXGJT6KncG
— JC Oviedo (@JCOviedo6) September 22, 2023
With the end of the third quarter approaching, Wall Street began waking up to the fact that Tesla would most likely miss the consensus delivery estimate of around 463,000 units.
The situation is quite drastic. Consider the fact that Pierre Ferragu, an uber-bullish Tesla analyst at New Street Research, has also been compelled to cut his estimates for Q3 deliveries to just 438,000 units, blaming factory shutdowns for this likely "material miss."
$TSLA delivery expectations have been muddied by temporary factory shutdowns during the quarter and questions regarding demand, Baird's Ben Kallo noted. He is forecasting 439,200 vehicle deliveries for the quarter for Tesla, down 6% from the prior quarter. The consensus view…
— *Walter Bloomberg (@DeItaone) September 26, 2023
Today, Baird's Ben Kallo has come forward with an investment note on this topic, forecasting that Tesla would only be able to deliver 439,200 units in the third quarter of 2023. The analyst blamed "temporary factory shutdowns during the quarter and questions regarding demand" as major stimulants behind Tesla's "muddied" delivery outlook.
$TSLA fanboy
brushing off news of the EU considering sanctions on China-made EVs.
1) 60% of Tesla's EU sales were China-made
2) Strip those out & $TSLA capute in China: 65%
3) Strip out all MIC Model Ys & it's 73%Thinks solution is to build another plant in the EU
https://t.co/zNkHZPoeZp
— Motorhead (@BradMunchen) September 26, 2023
Moreover, it seems that Tesla's China-sourced exports to the EU are also now in the crosshairs of sweeping regulatory scrutiny. For the benefit of those who might not be aware, the EU recently began investigating the Chinese EV players for leveraging the Asian giant's state-funded subsidies to distort competition in the European markets. While Tesla's Gigafactory in Berlin might play a role in deterring hefty fines, if the EU does end up banning all EV exports from China, Tesla would be materially impacted, especially in light of the fact that around 60 percent of Tesla's EU deliveries are sourced from China.
On the bullish side of the spectrum, Global Equities Research expects Tesla to eventually capture a whopping 90 percent of the EV market, owing to its "giga-scale." While the research house expects Q3 2023 to register the highest quarterly sales of the Model S Plaid, Tesla's competition is also registering its own incremental winnings. Consider the fact that a whopping 791 Mercedes-Benz EQC400 AMG EVs were registered in Northampton, UK, in one day, indicating a likely fleet sale.
Affordability is the top issue by far
— Elon Musk (@elonmusk) September 21, 2023
In the long term, affordability is the only critical metric that can drive sustainable sales for Tesla, a fact explicitly recognized by Elon Musk recently. The Future Fund's Gary Black, however, continues to believe that "education" via advertisements is what is needed for the EV giant to combat its demand-related malaise.
Do you think Tesla will be able to surprise analysts by managing to pull off a surprise beat on Q3 2023 deliveries or is the EV giant headed for a repeat of the brutal 2022? Let us know your thoughts in the comments section below.
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