Tesla vehicle insurance registrations in China are down compared to last quarter and the same time period in 2023 as Q1 vehicle deliveries appear likely to be well below Wall Street consensus. However, Tesla stock advanced Tuesday as the EV giant announced it is offering free one month trials for its full self-driving service.
Tesla insurance registrations in China totaled 13,700 last week, up 11.4% from the prior week, but down around 14% when compared to a year ago, according to data reported by CnEVPost.
With one week left in the first quarter, Tesla China insurance registrations totaled 116,400 down more than 5% vs. the same time frame in 2023. The latest data from China is added evidence that Tesla appears to be heading for a first quarter delivery miss.
Wall Street consensus currently still expects Q1 deliveries of 474,000 units, according to FactSet. However, this number is expected to come down sharply after many analysts cut predictions in recent days.
Predictions appear to be more around Tesla's 422,875 number from Q1 2023. The global EV giant hit a record 484,507 deliveries in Q4 2023. The previous quarterly delivery record was in Q2 with 466,140.
Tesla reports Q1 2024 deliveries in early April.
Meanwhile, Bloomberg reported Friday that Tesla is reducing production at the China plant to five days a week from 6.5 days. The output cuts started earlier in March and could continue through April, according to Bloomberg.
The move comes amid slowing EV growth in China and with Tesla's Shanghai facility already not producing at full capacity. Tesla observers have repeatedly said in recent weeks that global inventory appears high.
Morgan Stanley analyst Adam Jonas wrote Monday that if the Bloomberg the report is accurate "it would be yet another sign of oversupply in the world's largest EV market."
The analyst added that Tesla could be "witnessing price-cut fatigue with consumers (buyers' strike) and may be testing profitability levels that the company may not find acceptable."
"However, we prefer production cuts to price cuts to help balance supply with demand," Jonas wrote.
Full Self-Driving Excites The Market
Over the weekend, Tesla began rolling out its latest Full Self-Driving (FSD) update to Tesla customers.
Then on Monday, several emails from Chief Executive Elon Musk leaked on social media platforms, showing that he is making it mandatory in North America to install and activate the latest version of FSD on vehicles and take customers on a "short test ride before handing over the car."
"I know this will slow down the delivery process, but it is nonetheless a hard requirement," Musk wrote to Tesla employees.
Tesla then announced late Monday that it is offering a one-month free trial of FSD in the U.S. with the purchase of a new vehicle. The free trial is available for new orders of the Model Y, Model S and Model X.
"All U.S. cars that are capable of FSD will be enabled for a one month trial this week," Musk posted on X, formerly Twitter, late Monday
Tesla Stock Performance
TSLA shares jumped nearly 3% to 177.67 during market action Tuesday. On Monday, Tesla stock gained more than 1% to 172.63. Meanwhile, Cathie Wood and her Ark Invest funds loaded up on Tesla stock Monday, purchasing 163,421 shares, according to the company's daily trade disclosure.
Wood's Tesla trades were done through the ARK Innovation ETF and ARK Next Generation Internet. Cathie Wood spent $28.21 million on TSLA Monday, based on Tesla's closing price of 172.63. Ark and Cathie Wood have been buying up Tesla recently as it has it has hovered around lows.
Tesla stock gained 4.4% on the week, booking its first weekly advance in three weeks. Two weeks ago, Tesla stock dropped 6.7% to 163.57, hitting new 2024 lows and levels not seen since May 2023. TSLA is down 12% in March and the biggest loser on the S&P 500 index so far in 2024.
With 2023 in the rearview mirror, analyst consensus now has 2024 Tesla earnings below 2023's level. That signals another year of earnings declines for this growth stock. Wall Street expects Tesla earnings per share of just $2.95 in 2024, according to FactSet. That would be more than a 5% decline vs. last year's $3.12.
The EV giant ranks eighth in the 35-member IBD Auto Manufacturers industry group. The stock has a 33 Composite Rating out of a best-possible 99. Tesla stock also has an 11 Relative Strength Rating and a 68 EPS Rating.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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