With Tesla (TSLA +1.16%) shares falling 65% in 2022, shareholders were likely hoping for good news from the electric-car maker when it reported fourth-quarter deliveries. Unfortunately, the automaker's update on quarterly production and deliveries may not be enough to excite investors.
Though the period's deliveries marked a record for the company, they missed analysts' consensus forecast. In addition, Tesla's year-over-year growth rate in deliveries slowed significantly, compared to Q3.
It's possible that slowing demand is not the reason for the deceleration -- at least based on Tesla's commentary in its report about its production and delivery trends. Here's a closer look at the key facts from Tesla's update on fourth-quarter deliveries and production.
NASDAQ: TSLA
Key Data Points
The raw numbers
Electric-vehicle specialist Tesla said on Monday morning that it delivered 405,000 vehicles during the fourth quarter, missing consensus analyst estimates by around 13,000 units to 22,000 units, depending from where you source analyst estimates. The range in the consensus forecast is fairly wide because some analysts lowered their view for the quarter in December. Subsequently, some sources didn't include these updated forecasts.
Capturing how Tesla's growth has slowed, deliveries were up 31% year over year during the quarter. This is down from 42% growth in Q3.
Tesla's higher-volume and lower-cost Model 3 and Model Y vehicle deliveries came in at an estimated 388,131 vehicles, up 31% year over year. These deliveries were up 18% sequentially year over year. Combined Model S and Model X deliveries declined 8% sequentially but were up 46% year over year, totaling an estimated 17,147 units during Q4.
Considering the challenges the automotive industry faced during 2022, Tesla's full-year growth was impressive. Total deliveries in 2022 were about 1.31 million, up 40% year over year. Production increased 47% year over year to 1.37 million.
What investors should know
It's worth emphasizing that Tesla's commentary about these numbers suggests the slower growth rate in deliveries in Q4 is primarily due to a change in how the company is delivering vehicles -- not to deteriorating demand trends. "We continued to transition toward a more even regional mix of vehicle builds which again led to a further increase in cars in transit at the end of the quarter," Tesla said in the update.
Tesla explained in its third-quarter earnings call in October that it's doing this to reduce its "peak needs for outbound logistics." This change is expected to "simplify our operations, reduce costs, and improve the experience of our customers," explained Tesla chief financial officer Zac Kirkhorn during the call.
While deliveries fell short of analyst estimates, investors will need more information from Tesla to conclude that sales growth will continue slowing in the coming quarters. While higher interest rates and an uncertain macroeconomic environment are good reasons to believe Tesla's sales rate could slow in 2023, the company hasn't indicated this is the case yet. Investors should look for management's full-year guidance for deliveries in Tesla's fourth-quarter earnings report, which is scheduled for Jan. 25.
