By Senad Karaahmetovic
Shares of Tesla (NASDAQ:TSLA) are down over 4% in pre-open Monday after the electric vehicle (EV) giant reported lower-than-expected Q3 deliveries.
Tesla said it managed to deliver 343,830 units in Q3, lower than the 359,162 vehicle deliveries expected, according to Refinitiv. The Bloomberg consensus stood at 357,938 while estimates compiled by Street Account showed that analysts were expecting Tesla to report deliveries of 364,660 cars.
"Historically, our delivery volumes have skewed towards the end of each quarter due to regional batch building of cars," Tesla said in a statement.
"As our production volumes continue to grow, it is becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost during these peak logistics weeks."
While Tesla blamed lower deliveries on transit and logistics challenges, CEO Elon Musk said in a tweet that Tesla is aiming “for steadier deliveries intra-quarter” that will “reduce expedite costs & relieve stress on Tesla team.”
“Customer experience suffers when there is an end-of-quarter rush. Steady as she goes is the right move,” Musk added on Twitter.
Analysts at Goldman Sachs said the pullback in Tesla share price is understandable as deliveries are a “key driver of the stock.” They lowered the 2022 delivery estimate to 1.37 million from 1.4 million and still expect the EV company to deliver 461,000 units in Q4. As a result, the 2022 EPS estimates are also revised modestly lower.
“Given that wait times for vehicles in China have declined to a few weeks and macroeconomic conditions have become more difficult in general, some investors may view the weaker 3Q deliveries as the beginning of a period of sustained demand weakness. However, we believe the company remains well positioned to drive solid volumes and also margins/FCF going forward, and the vehicles in transit issue is a mitigating factor for the 3Q delivery miss,” they wrote in a client note.
For Bernstein analysts, Tesla’s goal of 50% delivery growth for 2022 “appears unlikely.” They were expecting Tesla to deliver between 370,000 and 375,000 units.
“We expect Tesla's 2H margins to be very good due to significantly higher volumes and improving ASPs given price increases from late last year. We forecast automotive GMs (ex credits) of 28.5% for Q3 and 29.5% for Q4, but see the potential for upside to our forecasts,” they also said in a note.
Finally, Wedbush analysts said the Q3 delivery numbers show that Tesla clearly experienced delivery challenges. The analysts are calling for Q4 deliveries to come in the 475K+ range as the unit set-up is “very robust.”
“In a nutshell, this quarter was nothing to write home about and the Street will be disappointed by the softer delivery number in 3Q. That said, we view this more of a logistical speed bump rather than the start of a softer delivery trajectory into 4Q/2023 and remain bullish on the Tesla story,” they said in a note.