Tesla, Inc. (NASDAQ: TSLA) finds itself at a juncture where the future may hold a quieter-than-usual first-quarter delivery report, as per the anticipations of a bullish fund manager. With a tinge of concern, the manager, taking cues from Troy Teslike’s projections, foresees Tesla delivering 409,000 units in Q1, a drop from last year’s 423,000 units. This could potentially mark Tesla’s first year-over-year sales decline since the tumultuous times of COVID-19 in 2020. The company has not been spared despite significant price cuts and incentives like the $7,500 EV credit, as well as the halo cast by the Cybertruck.
The Data: Gary Black of Future Fund shared insights pointing to a Wall Street consensus of 431,000 and 443,000 units on a median and average basis, respectively. This disparity raises concerns as Black views this as a potential turning point where Tesla may face a narrative shift regarding its volume trends, along with the imminent risk of falling short of expectations.
In the face of this anticipated downturn, Black also sees a glimmer of hope. He mentions that a counterintuitive rise in year-over-year Q1 deliveries, even if below consensus estimates, could prompt a rally in Tesla’s stock. Black speculates that investors might overlook the anticipated drop of 30,000 units in Fremont Model 3 Highland deliveries as a one-off event, focusing instead on the bigger picture.
Despite Tesla shares feeling the weight of a 29% year-to-date decline, Black believes that the stock could weather the storm and potentially bounce back post-report. He views the current stock price as factoring in the expected delivery miss, lending a sense of stability even amidst market fluctuations.
Looking ahead beyond the immediate horizon, Black envisions continued frailty in the upcoming quarters as the pace of electric vehicle adoption slackens. He projects challenges for Tesla in surpassing the 466,000 units delivered in the year-ago second quarter, possibly necessitating further price adjustments to maintain competitiveness.
With premarket trading data indicating a 1.10% increase in Tesla’s share price to $177.73, the market seems cautiously optimistic. Investors remain on the edge, waiting for the Q1 report to shed light on Tesla’s current standing amidst industry shifts and internal challenges.
The Bottom Line: Uncertainty clouds Tesla’s future as Q1 deliveries loom. Will the anticipated downturn mark the beginning of a new chapter for the electric vehicle giant, or can Tesla defy expectations and embark on a surprising rally? Only time will tell as investors hold their breath and await the unfolding of this automotive drama.
