Electric-car maker Tesla (TSLA -3.48%) is set to report deliveries for its fourth quarter early next week. The company usually reports quarterly deliveries a few days after the calendar quarter ends, so Tesla will provide an update on fourth-quarter deliveries on Monday.
With Tesla shareholders getting battered and bruised this year, the report next week will likely have a lot of eyes on it. Will figures from the report raise even more concerns? Or could they help alleviate some of the pain shareholders have endured?
Tesla stock is down more than 68% year to date, as of this writing, leaving many investors wondering how much lower the growth stock could go.
A record quarter is likely
Despite all the doom and gloom around Tesla stock, the company is largely expected to deliver a record number of vehicles during Q4. The current consensus analyst estimate calls for a record 425,000 deliveries for the period, up from the company's previous quarterly record (set in Q3) of 343,830.
Highlighting the electric-car company's strong growth trajectory, deliveries at this volume would translate to about 24% sequential growth and 38% year-over-year growth.
Why shareholders are worried
While fourth-quarter deliveries around this level could be good news for investors, it may not be enough to soothe their worries. Concerns about Tesla are more focused on what the company can accomplish in 2023, so any commentary in next-week's update about demand or expectations for delivery volumes in Q1 or for the full year of 2023 will likely be more important to shareholders than Q4 delivery figures. Unfortunately, however, Tesla's quarter-end production and delivery updates usually don't provide any forecasts.
Several things have Tesla investors on edge about expectations for 2023. First and foremost, China-based electric-car company Nio recently lowered its forecast for fourth-quarter deliveries by about 9%, citing the impact of a growing number of coronavirus cases in major cities in China. This gave Tesla investors more reasons to be concerned about how sales are faring in China.
Another sign of potentially waning demand in China has been reports of Tesla reducing its production output at its factory in Shanghai. Finally, a move from Tesla recently to cut prices on its Model 3 and Model Y vehicles in the U.S. has also raised concerns about demand for its vehicles.
Some of these recent headlines are certainly cause for concern. However, it's extremely difficult to predict whether some of these issues are only short term in nature as the company tries to address temporary challenges or if they're indicative of problems that could persist throughout 2023.
While Tesla's reported deliveries next week will be a useful data point for investors, the company may need to provide more information before shareholders can get a better idea of what they can expect from the company in the future. To this end, investors will be hoping for commentary from management implying it's bullish about continued strong growth in deliveries in 2023.
