As the fourth quarter approaches its end, Tesla finds itself on the cusp of breaking previous delivery records. In a recent report by Barclays, estimates indicated that the electric vehicle giant could achieve total deliveries of 515,000 units in the fourth quarter. This would represent a substantial year-on-year growth of 38% from the 1.8 million vehicles sold throughout 2023. On the same day, Tesla's stock increased by 2.3%, signaling a continued bullish trend in the market. However, analysts remain cautious, questioning whether this surge in deliveries will be enough to guarantee an annual increase in unit sales. There’s a general sentiment amongst investors that the underlying fundamentals of Tesla may not keep pace with these delivery numbers, implying that any misses in Q4 could have severe implications.
The company has pointed out that investor interest concerning Tesla’s stock fundamentals is largely limited at this moment. They suggest that a slight dip in short-term trading volumes "may not impact" Tesla's trajectory. This ongoing bullish momentum seems primarily fueled by advancements in self-driving technology and the company’s initiatives in artificial intelligence, areas which Tesla has been vigorously investing in and promoting.
Barclays further noted that Tesla's performance in the fourth quarter might not significantly influence the key factors currently propelling the bull market surrounding Tesla. In fact, despite a dip of 3.5% in Tesla's stock the prior week, it rebounded with that 2.3% increase, assuaging some fears of a deeper correction.
Despite fluctuations, Tesla's stock has seen an impressive rise of 70% as investors speculate that relaxed regulations surrounding self-driving cars mean widespread adoption is on the horizon. This optimistic outlook has been a strong contributor to the stock’s performance. However, Wednesday saw a sharp decline, with the stock dropping 8.3% to 440.13, even as it touched an all-time intraday high of 488.54 earlier. This volatility is relatively normal given the context of market performances, and analysts highlight that Tesla's stock is still trending above its 21-day and 50-day moving averages, suggesting that while a consolidation phase may be approaching, the long-term upward trend remains intact.
An analysis from Barclays on December 18 highlighted a significant disconnect between Tesla’s stock price and its fundamental health. Analysts noted that technical indicators and options trading have played substantial roles in propelling the stock's price. Many now draw parallels between Tesla's stock activity and that of cryptocurrencies, a market notorious for its immense volatility and speculative trading.
Regarding Tesla's Q4 deliveries, the company previously indicated they expected a slight uptick in automotive deliveries for the year. However, with sales in critical markets like the U.S. and Europe lagging, Tesla is scrambling to put plans in place to ensure they meet their goals. The electric vehicle titan had set their sights on achieving a total vehicle delivery of 1.8 million by 2023, which represents a 38% increase. While Tesla has suggested that these numbers might seem unachievable this year, they remain optimistic about future growth for their automotive division. In their third-quarter report, they stated that despite ongoing macroeconomic challenges, they anticipate a modest growth in vehicle deliveries in 2024.
Elon Musk, Tesla's CEO, provided a forward-looking perspective during the third-quarter earnings call, predicting a growth rate of 20%-30% in vehicle sales by 2025. Analysts remain watchful for the upcoming year, estimating a slight increase in deliveries to approximately 1.81 million vehicles in 2024. In order to reach the ambitious target for Q4, Tesla would need to deliver an impressive 514,925 units, significantly outpacing previous fourth-quarter records of 484,507 vehicles.
The trajectory of Tesla’s stock has been striking, especially as it eclipsed its previous historic high of $414.50 set on November 4, 2021. Data from MarketSurge indicated that the stock last touched the 400-dollar mark in January 2022. The recent decline in breadth—where only a few stocks like Tesla drive broader market movements—highlights potential structural issues within the market, marking a concerning sign for investors. The term "Fed Skip," which relates to the Federal Reserve potentially pausing interest rate changes during its monetary policy meetings, underscores the current economic environment and investor sentiment.
After a series of fluctuations, Tesla's share price witnessed a standout performance, particularly following its breakout above critical buying points on November 6. The stock surged past the $1 trillion market cap for the first time in two years on November 8, with the enthusiasm largely driven by positive projections around self-driving technology. On December 5, the stock jumped 3.2% to $369.49, breaking through a recent trading range and offering an additional entry point for current Tesla shareholders.
This rollercoaster ride of stock performance in conjunction with potentially record-setting fourth-quarter deliveries creates a complex narrative around Tesla as both a manufacturer and a publicly traded company. Investors are grappling with questions about the sustainability of its rapid growth and whether the projections can be met amidst broader economic uncertainty. As the year draws to a close, all eyes will be on Tesla and the disclosures that come from its impending quarterly reports, which will shed light on the company’s efforts to maintain its ascent in an increasingly competitive automotive landscape.