What happened
Tesla (TSLA +7.57%) stock tumbled nearly 10% early Tuesday morning, after reporting disappointing deliveries for 2022 a day earlier. The damage isn't being limited to just Tesla stock today, however.
As of 10:45 a.m. ET, used car dealer Carvana (CVNA 0.84%) is seeing its stock sink 2.2%, while among Tesla's electric car rivals, both Rivian (RIVN +2.63%) and Lucid Group (LCID 6.71%) are down sharply -- 4.9% and 6.2%, respectively.
NASDAQ: LCID
Key Data Points
So what
On Monday, Tesla disappointed investors when it confirmed -- as it had previously warned -- that it failed to reach its goal of growing deliveries 50% year over year in 2022. Deliveries grew only 40% instead, to about 1.31 million vehicles.
Analysts agree that the shortfall in deliveries was caused by a combination of factors, including COVID-related supply chain snarls and labor interruptions in China, and apparent softening demand for Tesla's EVs. Tesla itself noted that rising interest rates, which raise the cost of financing a Tesla purchase, may account for some of the softening demand.
The problem for Tesla's rivals, though -- Rivian and Lucid among them -- is that if interest rates are part of the problems Tesla is having, this is likely to depress demand for other companies' electric vehicles as well. Indeed, it could depress demand for all cars and trucks in 2023, which is probably why we're seeing Carvana stock continue to sink today as well.
Now what
Right now, Tesla's taking the news more on the chin than either Rivian or Lucid -- or Carvana for that matter. This makes sense, as Tesla is itself the source of today's bad news. It makes particular sense if you agree that many of Tesla's problems today arise from the company's focus on China as the source of much of its sales, Shanghai being currently the largest, most prolific of Tesla's car gigafactories.
Rivian and Lucid have minimal exposure to China at this point, and Carvana probably no exposure at all, insulating them from this risk. That said, what's bad news for Tesla right now could turn out to be good news for Tesla stock in the coming months.
Consider this: Even after "missing" delivery estimates yesterday, Tesla still grew its deliveries 40% year over year, grew its EV production 47% year over year (to 1.37 million vehicles), and probably grew its revenue by 50% year over year (says The Wall Street Journal). When Tesla reports its official sales and earnings numbers later this month, expectations are that sales will top $82 billion, with profits of nearly $13 billion -- twice what Tesla earned in 2021.
At a valuation of $343 billion and change, that could mean that in just a few short weeks, investors could be looking at Tesla as a stock trading for less than 26.5 times earnings, but growing sales 50% a year, and earnings 100%.
A valuation like that is likely to cause Tesla stock to bounce back sharply. Whether that will mean similar recoveries for the share prices of Rivian, Lucid, and Carvana remains to be seen.
