(BFM Bourse) – The automaker posted mixed fourth-quarter results. But Elon Musk’s statements to analysts about the strength of demand and production please investors. Stocks jumped on Wall Street.
Telsa gains momentum on Wall Street. The electrics automaker rallied 10.3% early in the session after posting quarterly results and an outlook that the market was looking forward to.
If the group posted record fourth-quarter earnings, the results are actually mixed in terms of analyst expectations. Admittedly, revenue of $24.32 billion is above the consensus, which was $23.71 billion. The same is true for adjusted earnings per share of $1.19 versus the $1.12 analysts expect on average, according to data compiled by Bloomberg.
However, car gross operating margins, excluding CO2 credits from other manufacturers, were disappointing at 24.3% versus analysts’ expectations of 26.4%, UBS notes.
Price cuts work
Beyond those half-ass figures, the market is being tempted by Elon Musk’s comments as Tesla shares did soar in post-hours trading on Wednesday night when the prominent businessman spoke to financial analysts.
According to Bloomberg and Reuters, Elon Musk has been sending encouraging signals about demand being the focus of the market.
Tesla aims to increase its production by 50% every year, as well as its deliveries. However, for the whole of 2022, shipments grew only by 40%, and production by 47%.
To boost volumes, Tesla slashed the prices of its models in Europe and the US earlier this month after cutting prices in China a few months earlier. Bernstein analysts also fear that the move will put pressure on other manufacturers such as Volkswagen, Renault or Volvo.
“This price cut really matters to the average consumer,” Elon Musk told analysts. Tesla’s CEO also said orders in January were about double the level of production in January. While the businessman said he expects a “pretty tough recession this year,” he assured demand for Tesla “[serait] well, despite the possible reduction of the automotive market as a whole.”
The group aims to produce 1.8 million vehicles this year. But Elon Musk explained to the financial community that the target appeared to be “cautious” and elaborated that production could approach 2 million vehicles without “major” disruptions.
The manager also indicated that the Cybertruck group’s electric pickup truck would not enter production until 2024.
Julien Marion – © 2023 BFM Bourse
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