Tesla saw sales of China-made vehicles jump more than 10% in November compared to a month ago even as the number dropped 18% vs. last year. The EV giant began delivering its revamped Model 3 at the end of October, according to data released by the China Passenger Car Association (CPCA) Monday. TSLA stock edged lower.
Tesla sold 82,432 China-made vehicles in November, up 14.3% from 72,115 in October, breaking two straight months of sequential declines in vehicle sales. However, Tesla's November sales total fell 17.8% from 100,291 in Nov. 2022. The data released by the CPCA Monday include exports.
Tesla stock dropped 1.4% to 235.56 Monday during market action. Last week, TSLA shares rose 1.4% to 238.83. However, Tesla stock booked three consecutive losses on its Cybertruck delivery event.
TSLA has recently been ramping up the EV price war once more in China. The U.S.-based EV company has raised prices on Model Y trims in China for five-straight weeks, dating back to the end of the third quarter.
However, as Tesla continues to raise vehicle prices in China, the company has started offering a $1,127 insurance subsidy for base-trim Model 3 and Model Y vehicles in inventory through year-end, local media reported. The entry-level trims account for the vast majority of Tesla's China sales.
Tesla also is offering low-rate loans to spur demand. Top competitor BYD recently stepped up discounts on a range of models, as the China EV and battery giant aims to hit a sales target of 3 million EVs in 2023. Other China EV makers are rolling out new models at highly competitive prices.
Tesla Targets Record Q4
Meanwhile, Tesla is looking to meet its goal of delivering 1.8 million vehicles in 2023. So far in Q4 Tesla China insurance registrations, a rough gauge for vehicle deliveries, total 88,500 for the quarter, down less than 1% compared to the same point in Q3.
Before Tesla delivered 12 Cybertrucks Thursday, the EV company unveiled its new Model 3 in China on Sept. 1 with official sales beginning on Oct. 19. Tesla started delivering the "Highland" Model 3 on Oct. 26 in China, with European deliveries also underway. The global EV giant also launched a slightly updated Model Y in China earlier in October.
Through the end of Q3, Tesla delivered about 1.324 million vehicles globally for the year, meaning the company needs to deliver roughly 476,000 in Q4 to reach 1.8 million. That's 2% more than its record 466,140 deliveries in the second quarter and a rebound from Q3's 435,059. Tesla reiterated its 1.8 million vehicle delivery goal in its third-quarter earnings.
However, since Oct. 18, analyst projections have dropped. Wall Street consensus has Tesla vehicle deliveries in 2023 totaling 1.797 million, just below that 1.8 million target, according to FactSet. Meanwhile, Wall Street is currently expecting 473,000 deliveries in Q4.
Analysts' average 2023 EPS estimate has also fallen 7% since the company's Q3 earnings report. Wall Street is predicting 2024 earnings will now undercut 2022, with analysts expecting EPS of $3.87 — down 14% vs. the $4.50 view before Q3 earnings.
Tesla Stock Performance
The stock is building the right side of a double-bottom base giving it a 278.98 buy point, according to MarketSmith analysis. Tesla stock is about 15% below its official buy point.
Since the beginning of 2023, Tesla stock has surged more than 90%, easily outperforming the broader S&P 500 index.
Tesla stock ranks sixth in the 35-stock IBD automaker industry group. The S&P 500 component has an 85 Composite Rating out of a best-possible 99. Tesla stock also has an 83 Relative Strength Rating and an 88 EPS Rating.
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