Tesla’s fourth-quarter and full-year 2022 earnings are upon us, and with it Wall Street expectations for the EV maker to hit revenue for the quarter of $24.03 billion and adjusted earnings per share to hit to about $1.13, according to Data from Yahoo Finance. If Tesla hits that revenue estimate, it will mark a record for the company, but also the slowest pace of growth since mid-2020.
As usual, Tesla will share its results Wednesday after the market closes, with management discussing earnings and answering analyst questions during a webcast at 5:30 pm ET.
The automaker is wrapping up a tumultuous year in which its share price fell 65% due to factors ranging from CEO Elon Musk’s distraction with Twitter to fears over slowing sales in coronavirus-hit China. pandemic. Tesla is expected to address these concerns, as well as its recent vehicle price cuts and missed fourth-quarter delivery estimates, during tomorrow’s call.
In fact, so much has happened in the past few months in Tesla land that Dan Ives, managing director of Wedbush Securities, saying the upcoming earnings call and guidance commentary will be “one of the most important moments in Tesla’s history and for Musk himself.”
Before we dive into our expectations for the call, note that Tesla shares closed Tuesday at $143.89, rallying more than 30% since the beginning of this month after losing two-thirds of its value since April 2022.
An appearance by Musk
Musk doesn’t always join Tesla’s earnings calls, and indeed, he’s currently busy defending himself in court over claims he ripped off investors with his infamous 2018 “funding secured” tweet, but the CEO is expected to make an appearance tomorrow, if only to assuage investor fears that it’s not paying enough attention to Tesla since it took over Twitter.
The executive also went to trial in November to defend his $56 billion Tesla payout package after a shareholder sued to terminate the deal, which he said was unfairly awarded to Musk, a “full-time CEO.” partial”.
Missed delivery estimates
During Tesla’s third-quarter earnings call, Musk promised that Tesla would deliver an “epic year-end.” The automaker set a record for vehicle sales and deliveries but still missed its own and Wall Street estimates. Fueled in part by last-minute discounts for Model Y and 3 vehicles in December, Tesla delivered 405,278 vehicles in the fourth quarter. The street expected between 420,000 and 425,000 units to be delivered.
Analysts are likely to question the company for its mistakes, as the fourth quarter marked the third straight quarter in which the automaker missed as many deliveries as promised. Tesla could be asked to provide more realistic estimates for 2023.
We could also see updated delivery and sales numbers for the fourth quarter when earnings are released.
Margins on vehicle price cuts
Earlier this month, Tesla cut the price of its Model Y long-range crossover (20% to $52,990) and Model 3 sedan (14% to $53,990) for US buyers. The vehicles’ new lower base price qualifies them for the $7,500 federal tax credit under the Inflation Reduction Act (IRA), which was signed into law in August. Under the terms of the IRA, the threshold for electric sedans is $55,000 and for SUVs, vans and vans it is $80,000.
Tesla also cut prices on its Model S and Model X sedans, which are still too expensive to qualify for the EV tax credit.
The most recent price cuts mark at least the fourth time the automaker has discounted its vehicles or offered credit in recent months. Tesla announced price cuts in China up to 9% on Model 3 and Model Y in October, further slashing prices by nearly 14% earlier this month. The company also first issued a $3,750 discount for the Y and 3 models in the US and Canada in early December, before increasing it to $7,500 later in the month.
Investors have not taken kindly to the price cuts, which they feared signal a drop in demand for the iconic electric vehicles. However, the price cuts appear to have boosted demand for the vehicles. What investors are hoping to gauge is whether the price cuts have cut into Tesla’s margins too much. It may be too early to have those answers, but Tesla will likely provide some guidance.
Updates on new gigafactories
Tesla announced plans Tuesday to invest $3.6 billion more in its gigafactory in Nevada, adding two new facilities dedicated to building battery cells and Tesla Semis. The automaker could look at these plans further, for example, when they expect to break ground on the facility and begin production.
The automaker has said it has a multi-year plan to increase production by 50%, so analysts will want to hear about other new gigafactories. There have been reports that Tesla is planning a $10 billion gigafactory in Mexicoand the company is nearing an agreement to build factories in indonesiatoo.
More about Semi and Cybertruck
Tesla finally revealed its first production versions of the long-delayed Electric Semi in December, delivering Pepsi’s first orders for 100 trucks, which the company ordered in 2017. Several high-profile companies, including Anheuser-Busch, Pepsi, Walmart and UPS also booked Semis, so we may get some updates on production and when those companies can expect deliveries.
Tesla’s Cybertruck also suffered multiple delays, but Musk said in July that the company was on track to launch the truck in the middle of this year. We look forward to more updates over time, as well as new features. In September, Musk said the Cybertruck would be “water resistant enough to briefly serve as a boat.”
