Tesla’s price cuts, consumer demand are focus of Q4 earnings

Another question is whether the Cybertruck pickup is scheduled to start production in mid-2023, according to Tesla’s investor relations department.

In general, Tesla’s fourth quarter earnings are expected to be positive due to significantly higher vehicle deliveries and higher gross margin per vehicle compared to the industry as a whole. But analysts say the prospect of a prolonged decline in earnings could weigh on the stock after earnings are announced.

Managing partner Gene Münster said, “A simple calculation shows that the average discount across all the company’s vehicles is close to 15-20%, mostly due to profits.” In comments on CNBC Monday, at Deepwater Asset Management.

Münster expects Tesla’s gross profit per vehicle to fall from 27% in the third quarter of 2022 to 15% in 2023 and said he would like to hear the company’s guidance.

“I think in the end they made the right decision,” Munster said of the price cut. “They’re going to really corner other car companies in 2023 and 2024.”

Bank of America said in a research note last week that Tesla’s lower prices would significantly increase sales volume even if revenue per vehicle fell by 10-20%. Banks said Tesla was able to implement its new pricing strategy because it has much higher margins than its peers, many of whom are losing money on electric vehicles.

Since the price cut, Tesla’s stock has been on an upward trend. Its shares closed at $143.75 on Monday against $122.40 on Jan. 13, the first trading day after the automaker cut prices in global markets.

In the fourth quarter, Tesla delivered 405,278 vehicles, well below analyst estimates of about 430,000. Shipments for the year were up 40% to his 1.31 million units, below Tesla’s own forecast of about 50% growth. According to Tesla, global production is up 47% from 2021 to a record 1.37 million units.

Analyst estimates show the automaker is expected to report revenue of $24 billion, up 36% year-on-year, according to Reuters. Earnings per share he is expected to be $1.13, or about $3.6 billion.

“If Tesla raises more capital, expands production capacity more rapidly, and drives stronger growth, then there is an opportunity for Tesla to scream competition in the EV market,” Bank of America said in a statement. “Tesla has chosen not to pursue that approach, but its recent pricing actions may reflect a similar method to keep competition out.”