The Lead-Up To Tesla’s Quarterly Financial Report

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Speculation about the content of Tesla’s quarterly financial report is always rampant. Today’s announcements will be a harbinger of the all-electric vehicle maker’s stock price and a primer in the likely state of global EV sales generally in 2024.

Investors are keen to learn about CEO Elon Musk’s vision for demand, future sales growth targets, and profit margins. Tesla is expected to make a profit selling EVs, unlike most legacy automakers and rival EV startups. Analysts expect Tesla’s gross profit margins to have edged up in Q4 to 17.7%. However, that’s roughly 40% below the combative peaks of 2022 and 7.4 points below a year ago.

Tune in after the Markets Close Today

Tesla posts its quarterly financial results for Q4, 2023 after markets close today. At that time, Tesla will issue a brief advisory containing a link to the Q4 and full year 2023 update, which will become available on Tesla’s Investor Relations website. Tesla management then holds a live question and answer webcast after the advisory to discuss the Company’s financial and business results and outlook.

So far Tesla has said it produced approximately 495,000 vehicles and delivered over 484,000 vehicles in Q4, 2023. In 2023, vehicle deliveries grew 38% YoY to 1.81 million while production grew 35% YoY to 1.85 million.

Barrons indicates that Wall Street is looking for earnings per share of about 73 cents from sales of $25.6 billion. A year ago, Tesla reported per-share earnings of $1.19 from sales of $24.3 billion. Morgan Stanley analyst Adam Jonas on Monday cut his TSLA price target to 345, down from 380 but kept an overweight rating on the shares. He expects Tesla’s 2024 volume and profitability outlook to be modest when it reveals its quarterly financial report today.

Tesla reminds us that its net income and cash flow results will be unveiled along with the rest of its financial performance today, but that Tesla vehicle deliveries represent only one measure of the company’s financial performance. As such, deliveries, they say, should not be relied on as an indicator of quarterly financial results, which depend on a variety of factors, including the cost of sales, foreign exchange movements, and mix of directly leased vehicles.

Inquiring Minds Want to Know

Tesla has altered some of its longtime messaging and branding so that it looks a bit like a traditional automaker. It now offers price discounts, acknowledges supply chain delays, and is even getting out on the road with the new Cybertruck on a multi-city tour of China  — the likely goal of which is to diffuse concerns about the vehicle’s range and towing capacity.

Many interesting questions have been posed on the Tesla IR site ahead of the Wednesday call.

  • Given that you moved the start of the next generation compact vehicle production to Austin, has the timeline improved so that we might see next generation platform vehicles in 2025?
  • What has been the barrier to ramping 4680 cells into the multi million cells per week rate and when do you expect to get there?
  • Should retail shareholders be concerned that Elon has stated he is uncomfortable expanding AI and robotics at Tesla if he doesn’t have 25% of voting?
  • What is your expectation for automotive gross margins (excluding regulatory credits) for the full year?
  • When will Tesla start construction on the Giga Nevada expansion and Giga Mexico, and when can we expect each of these to produce their first products such as 4680, Semi, and next gen vehicles?
  • When will you ramp to mass production of the Semi and what are the barriers to getting there?
  • How many cybertruck orders are in the queue and when do you anticipate you will be able to fulfill all existing orders?
  • When will Tesla have sufficient North American battery production to support the $7500 EV tax credit for the Model 3?
  • When will Optimus be deployed in Tesla’s Gigafactories?

These granular-level questions have our CleanTechnica audience musing, for sure.

The Big Picture Topics that Make Tesla Investors Sleepless

Some of the most frequent and ongoing questions about Tesla’s performance picture continue to resonate in 2024 as interest rates seem on a downward trend but governments around the world are pulling back from incentives for EV purchases.

An affordable Tesla: The timing for the launch of the long-awaited $25,000 Tesla Model 2 lineup – the next driver for volume growth – is the most pressing question for most small shareholders. During the May, 2023 Annual Shareholder Meeting, Musk teased a future Tesla model that would be compact and modestly priced. Musk described the Tesla catalog as having “two new products that I think you will be very excited about.” Without adding details, he did say that the design and manufacturing techniques of those products are “head and shoulders above anything else in the industry.” The new affordable model could be part of more than five million units a year additionally that the company would manufacture. We didn’t hear any substantive announcement in May, but is it possible that a lowish-priced Tesla is on today’s agenda?

Top 7 stock designation: If Tesla is to hold its place as one of the “Magnificent Seven” tech stocks driving the market to new records, it needs to have a good showing today. NBC’s Jim Cramer on Monday suggested Tesla could lose its spot in the Magnificent Seven megacap stocks list. Tesla rose 0.3% Wednesday, still sharply below its 50-day line and now falling further below the 200-day line.

Artificial intelligence: Musk’s artificial intelligence (AI) projects within the Tesla organization are pivotal to the company’s future innovation. But the CEO has linked his AI research to a larger overall stake in Tesla. An undisputed leader in AI, Musk was part of a private tutorial to US Senators subsequent to commitments announced in July, 203 by the Biden-Harris administration, which sought to “seize the tremendous promise and manage the risks posed by Artificial Intelligence (AI) and to protect Americans’ rights and safety.”

Price vs. profit: Tesla has slashed prices for its best-selling Model Y in the US, Europe, and China. Cuts, as well as lowered price targets from brokerages UBS and Wells Fargo, sent Tesla’s shares down nearly 3%, adding to what has been a poor start for the stock in 2024. That difference applied to a $50,000 Model Y amounts to $3,700 a vehicle less flowing into the cash drawer. Tesla reduced prices in Germany for its Model Y Long Range and Model Y Performance by 5,000 euros to 49,990 euros ($54,340) and 55,990 euros respectively, representing a discount of 9% and 8.1% compared to their previous prices. It also cut the price of Model Y rear-wheel drive models by 4.2%. In France, the company reduced its Model Y prices by as much as 6.7%. Prices were cut by up to 10.8% in Denmark.

We’ll be following the Tesla quarterly financial report today and will follow up afterward to assess the impact of any announcements. Stay tuned.


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