Tesla has said it expects "slight" vehicle deliveries growth this year, but with the end of the fourth quarter fast approaching, the EV giant finds itself looking for answers with unit sales lagging in the U.S. and Europe.
The company saw vehicle deliveries rise 38% to 1.8 million in 2023 and while Tesla has said that sort of increase this year is out of reach, it is predicting growth in its automobile segment.
"Despite ongoing macroeconomic conditions, we expect to achieve slight growth in vehicle deliveries in 2024," Tesla said in its third-quarter earnings release.
Looking further out, Chief Executive Elon Musk proclaimed on the Q3 earnings call that vehicle sales could grow "20%-30%" in 2025.
With Tesla predicting slight vehicle delivery growth in 2024 vs. 2023's 1.8 million, the EV giant needs far more than the Q4 2023 record of 484,507 deliveries. Analyst consensus currently forecasts 498,000 vehicle deliveries in Q4 and 1.79 million for 2024, according to FactSet.
Goldman Sachs analyst Mark Delaney wrote early Wednesday that data out of the U.S., Europe, and China show mixed demand trends for Tesla.
Delaney said that Tesla is not currently tracking to meet its objective to grow vehicle deliveries in 2024, which would require 515,000 or more units in Q4. The analyst lowered his Q4 deliveries estimate to 510,000, down from 515,000. The firm keeps a Neutral rating on Tesla with a $250 price target
Goldman lowered its Q4 deliveries estimate to 510,000 units from 515,000, which compares to the consensus estimate of 515,000.
TSLA stock surged 3,2% to 369.49 during market action on Thursday, adding to a 1.9% gain on Wednesday. The stock has been consolidating around highs in recent weeks.
Riding Strong Demand In China
Nine weeks into the fourth quarter, Tesla registrations in China, a rough gauge for deliveries, are up nearly 6% compared to last quarter and have increased 14.2% vs. a year ago.
Tesla's year-to-date China registration, which lagged earlier this year, turned positive in the third quarter, and are now up about 7% compared to the same time frame in 2023.
China demand for Tesla vehicles also buoyed the company's strong performance in the third quarter.
However, Troy Teslike, whose delivery estimates and Tesla data tracking are highly respected among retail Tesla investors, wrote Tuesday on X he expects U.S. and Europe sales to drop by more than 30,000 units in 2024 vs. 2023. China sales are expected to grow by more than 48,000 units, according to Teslike.
"There is no need for celebration over the China numbers when sales are down in the U.S. and Europe," Teslike wrote.
Tesla Incentives
Meanwhile, Tesla continues to ramp up incentives, especially in the U.S., as the company looks to stimulate demand. The EV giant recently announced a year-end discount on local Model Y sales.
Tesla announced on Nov. 25 that customers in China who order and get delivery of any of the two lower-priced variants of the Model Y between Nov. 25 and Dec. 31 could receive a $1,370 discount.
The EV giant also extended the five-year, 0% interest financing incentive for all Model 3 and Model Y vehicles until the end of the year. The incentive was originally set to expire on Nov. 30.
However, Tesla on Monday told employees on its Cybertruck production line to take the next three days off, Business Insider reported Tuesday, citing an internal memo. Regular scheduling will resume on Friday, the company reportedly told staff.
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Goldman Sachs wrote Wednesday it expects Tesla to increasingly use incentives to try to achieve its Q4 volume target. The analyst added that part of Tesla's motivation for using incentives could be an effort to reduce Model Y inventory ahead of a possible launch of a refreshed version in early 2025.
Meanwhile, the $7,500 EV tax credit under the Inflation Reduction Act could also be on the way out the door in 2025, with President-elect Donald Trump signaling he is likely strip away the tax credit.
Tesla Stock Performance
Tesla stock fell 2.1% to 345.16 last week, which included a 3.7% jump on Friday. Shares have been consolidating around 34-month highs for the past couple of weeks.
The EV giant is on a 40% tear since Trump defeated Vice President Kamala Harris in the Nov. 5 election. TSLA stock has surged in recent weeks in part on hopes that self-driving is coming soon, with the Trump administration easing the regulatory path.
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, wrote on Sunday that Trump could "accelerate some of the FSD and autonomous initiatives for Tesla once he is in the White House."
"We believe a Trump White House helps unlock the $1 trillion of autonomous/AI value to Tesla's stock as autonomous/FSD is likely accelerated starting in 2025 and a tailwind for Cybercab timing," Ives said.
Tesla stock ranks first in the 35-member IBD Auto Manufacturers industry group. The stock has an 89 Composite Rating out of a best-possible 99. Shares also have a 96 Relative Strength Rating and a 78 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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