The latest production and delivery figures from Tesla have raised concerns as they fell significantly short of expectations. In 2022, Tesla managed to manufacture 1.37 million electric vehicles, a figure that missed the company's internal target of 50% growth. Additionally, global deliveries during the last quarter also failed to meet forecasts.
However, despite this setback, there's reason to believe that Tesla's fortunes are poised for a comeback in the near future.
One of the key factors affecting Tesla's recent performance is its CEO, Elon Musk's, expressed interest in acquiring Twitter. This announcement had a noticeable impact on Tesla's stock, but the underlying issue isn't solely about stock price fluctuations; it's about the potential impact on Elon Musk's reputation as an innovator.
Twitter, prior to Musk's interest, had a history of financial struggles and was often characterized by online disputes rather than profitability. Musk's remarkable achievements, such as accelerating the world's transition to sustainable energy sources and revolutionizing the aerospace industry, were overshadowed by biased critics who downplayed his accomplishments and labeled his grand visions as opportunistic falsehoods.
However, a more insightful analysis suggests that Tesla's current demand challenges are primarily linked to tax incentives. These incentives, which are vital in stimulating electric vehicle purchases, are set to diminish in China, the world's largest car market, in 2023, and they are being phased out in the United States as well. Starting from January 1, 2023, American buyers of certain Tesla models will receive a $7,500 tax credit, potentially leading many to postpone their orders until the new year. As a result, the current pessimism surrounding Tesla's demand outlook is likely to dissipate as these deferred orders flood in.
Despite these concerns, Tesla's fourth-quarter performance is commendable, with 405,278 vehicle deliveries compared to production of 439,701 units. Both figures set new records, reflecting year-over-year growth of 24.7% and 30%, respectively. While these results may have fallen slightly short of analysts' median delivery expectations of 427,000, Tesla remains in a strong position.
With Tesla's shares currently trading at $123.18, the stock is valued at 23.2x forward earnings and 5.2x sales. These financial metrics present attractive entry points for investors, especially considering the long-term prospects of the electric vehicle industry and Tesla's leading position within it. Resistance can be found around the $160 level, while support rests at the recent low of $108. Given these factors, it's reasonable to anticipate a rebound toward higher levels in the coming months. Tesla's journey may have hit a speed bump, but the road ahead seems promising.