Source: Michael Vi / Shutterstock.com
Tesla (NASDAQ:TSLA) enthusiasts eagerly await tomorrow, April 2, for the unveiling of quarterly delivery numbers. TSLA stock kicked off the day in the red.
Projections suggest Tesla might have manufactured 425,000 vehicles globally. However, a tweet on March 29, celebrating the production of the 6 millionth car, hints at a tally as high as 450,000.
TSLA stock hovered around $174 per share at the dawn of April 1, boasting a market cap near $550 billion. With a decline of 29% in value this year, its pinnacle hit close to $300 per share.
Legitimizing the Fervor
The soaring valuation of Tesla, nearly double that of Toyota Motor (NYSE:TM), the runner-up, derives from Tesla’s expansion and profitability.
In the initial quarter of 2023, Tesla engineered 423,000 cars. Since the onset of the pandemic, no production data was reported. Should the total production tally meet or surpass 430,000, it signals sustained growth, surpassing most analysts’ estimates.
Following China’s BYD (OTCMKTS:BYDDF) overshadowing Tesla in deliveries during the 3rd quarter of 2023, Tesla’s zenith in production unfolded in Q4 of 2023 with 484,500 vehicles.
Despite potentially meeting production predictions, concerns loom regarding profitability. Recent marketing endeavors, including Tesla’s initiation of advertising, have met with dissent from CEO Elon Musk.
After triggering a price competition in China a year ago, Tesla now finds itself on the defensive there. A surge in the cost of the Model Y was promptly challenged by several local firms slashing prices.
Entering the Chinese market is smartphone giant Xiaomi (OTCMKTS:XIACY), which amassed 120,000 orders for its SU7 sedan within 36 hours. At the launch ceremony, founder Lei Jun teased, “Is it time for Tesla Model 3 users to elevate?”
TSLA Stock: The Road Ahead
With Chinese automakers dominating their domestic arena and aiming for global conquest, Tesla must rejuvenate its product portfolio to compete effectively. Relying solely on the CyberTruck won’t suffice.
On the publication date, Dana Blankenhorn did not possess any positions, directly or indirectly, in the securities discussed. The views expressed are solely those of the author, in accordance with InvestorPlace.com Publishing Guidelines.
