Tesla Tesla Set Record But Miss Views Amid Demand Concerns

Tesla (TSLA) reported record vehicle deliveries in the third quarter on Sunday, but came in well below views. The report on Tesla car deliveries may bolster demand concerns, especially in China, where electric vehicle giant Elon Musk is ramping up production capacity.

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Tesla stock fell strongly on Monday morning after cutting short-term lows on Friday.

Tesla’s deliveries totaled 343,830 electric vehicles in the third quarter, up 42% from a year earlier and surpassing the first-quarter record of 310,048. It was also 35% higher than 254,695 in the second quarter. The Shanghai factory faced prolonged shutdowns and a slow recovery in the second quarter due to the Covid shutdown.

But analysts expected Tesla to deliver 350,000 to 370,000, with the consensus just above 360,000.

Given Tesla’s significant expansions over the past six months, the increase is relatively modest. Tesla Berlin opened in March and the Austin factory in April, although those locations are still slowly increasing. The Shanghai site received a significant capacity upgrade in July and early August, with this effort temporarily limiting production.

In fact, Tesla’s production significantly exceeded deliveries in the third quarter, as the EV giant produced 36,5923 vehicles last month.

Tesla delivered 325,158 Model 3 and Model Y vehicles in the third quarter, along with 18,672 Model S and luxury Model X EVs.

In a press release, Tesla noted logistical challenges and an increase in the number of vehicles in transit.

Wedbush analyst Daniel Ives wrote in a note Monday that while Tesla “clearly” faced some delivery challenges in the quarter, concerns about demand issues.

Tesla delivery: China demand concerns

There have been recent indications that demand for Tesla may not be strong enough to meet the increased capacity, especially in China.

Reuters reported last week that Tesla plans to keep production at its upgraded Shanghai plant at about 93% of capacity through the end of the year. Recent improvements to the plant have increased production capacity by nearly a third.

Wait times for new Tesla China cars also fell sharply in September, indicating little or no backlog. Wait times increased modestly again, as Tesla returned to exporting Shanghai cars at the start of the quarter.

Tesla started introducing new insurance support in China last month, serving as De facto price cut. This insurance support will continue until the end of the year.

There is speculation that Tesla will announce a China price cut in early October. Another option is for Tesla to export a larger share of its production in Shanghai. There are some reports that this is already happening, with Shanghai switching to export a few days ago. This may be why Tesla has more vehicles in transit.

The European backlog also began to decline. Tesla recently introduced a short-range Model Y, often at a much lower price than the previous base model, to the European market. Also, the Berlin plant should slowly account for a larger share of Tesla’s sales in Europe.

Adding to pressure on Tesla deliveries: BYD (BYDDF) And the New (NIO) just introduced two Model 3 competitors, and the Model Y will likely face increased competition over the next year.

Tesla Delivery: Electric Vehicle Lineup

Tesla produces the Model S sedan and Model X SUV, as well as the Model 3 sedan and Model Y crossover. However, the vast majority are Model 3 and Y models.

Other vehicles, including Semi and Cybertruck, were pushed back several times. Musk said the Cybertruck is on its way to mid-2023 and that Tesla Semi will begin deliveries by the end of 2022.

Q3 Tesla shipments came on the heels Artificial Intelligence Day at Tesla on FridayThe company showcased its latest humanoid Optimus robot prototype, as well as advances in artificial intelligence in driver assistance software. Musk tweeted that the event was primarily a promotion to recruit AI and robotics engineers.

Despite missed deliveries, the truth (TFCAnalyst William Stein raised the TSLA price target to $348 from $333. Stein wrote in a note Monday that the company’s chances of success in its AI effort “significantly beat” its near-term price target revision of the model.

Tesla Stock

Tesla stock fell more than 7% to 246 early during Monday market trading. Stocks are at their lowest since late July. The stock fell 1.1% to 265.25 on Friday, breaking through its recent lows. TSLA pulled back from the 50-day moving average for the week.

Tesla stock undergoes long-term consolidation with 402.73 buy pointto me MarketSmith. Investors can see the pattern as long double bottom base, made 384.35 entries. However, the TSLA stock chart is in flux.

There is also a smaller base in the broad and loose work of the past year. Now looking like a small double bottom pattern, TSLA stock has an entry of 313.90.

Tesla has Compound classification Out of 83. It has 78 relative strength rating, exclusive IBD stock check A measure of stock price movement with a score of 1 to 99. The rating shows how the stock has performed over the last 52 weeks against all other stocks in the IBD database. EPS rating is 77.

Clash of the Titans: Tesla vs. BYD

China’s Tesla competitors

Musk and Tesla face new competition in the Chinese electric car market from BYD, Nio and Lee Otto (LI), And the XPeng (XPEV). Nio, Li Auto and Xpeng September deliveries reported On Saturday, with BYD following early on Monday.

NIO and BYD target Europe in the Tesla challenge

BYD reported that September sales exceeded 200,000 in September. In the third quarter, BYD sold 538,704 NEVs, up 194% from the previous year and up from 355,021 in the second quarter. NEVs include all-electric vehicles, plug-in hybrids, and hydrogen fuel cell vehicles. Those numbers easily topped Tesla’s shipments in the third quarter, while BYD gains ground over its US pure-electric rival.

BYD, the world’s largest electric, hybrid and plug-in car maker and the largest seller of pure electricity in China, deals directly with the Tesla Model 3 for the first time. BYD Seal, with similar specifications but $10,000 less than the Model 3, began deliveries in late August. It is estimated that seal deliveries should exceed 1.5 million in 2022. The company also Targeting 4 million in 2023.

Luxury EV startup Nio began delivery of the ET5, a Model 3 competitor, on September 30.

BYD and Nio are also looking to cement their position in the European market, after beginning sales in Norway in 2021. BYD introduced three all-electric models to Europe at a virtual event on September 28, and Nio is scheduled to participate in a similar event in October. 7. BYD has recently started deliveries in Australia, India and several other Asian countries, and is launching in several other markets in the next few months.

Please follow Kit Norton on Twitter Tweet embed For more coverage.

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