2023 was a lackluster year for Tesla (NASDAQ: TSLA). The growing competition from other EV producers seems to have taken its toll, which continued into this year.
Even after multiple price cuts to increase competitiveness, which drove the deliveries up by 38%, it still wasn’t enough according to the company’s target of 50% upside.
Tesla warns of a slower year of growth as it focuses on delivering a new model in 2025 called ‘Redwood,’ which will most probably be a compact crossover that aims to start a new generation of EV vehicles and further decrease the price of its models.
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Upon the news of missed expectations for revenue, earnings per share (EPS), and gross margin, TSLA stock fell -7% in the after-hours trading.
Reasons for slowdown
The company cautioned that the production scale-up for its latest vehicle, the long-awaited Cybertruck pickup, commenced at the end of 2023, would be lengthier due to its manufacturing complexity. Elon Musk, the CEO, stated three months ago that it might take over a year for the Cybertruck to become profitable.
In the fourth quarter it was the initial instance where the company relinquished its top spot in global electric vehicle sales to the Chinese automaker BYD.
As a result, Tesla posted adjusted earnings of 71 cents per share, slightly below the forecast of 74 cents per share, representing a 40% decline from the previous year.
Quarterly revenue reached $25.2 billion, marking a modest 3% increase from the previous year, despite a notable uptick in deliveries. This reflects the impact of lower average sales prices following repeated price cuts, falling short of the anticipated $25.6 billion.
TSLA stock price analysis
At the time of press, TSLA stock was trading at $191.38, marking a decrease of -7.92% in the pre-market trading and a -4.13% loss in the last five trading days.
Technical indicators are also bearish on this stock, with a ‘sell’ rating at 14 and moving averages concurring at ‘strong sell’ at 13. Oscillators remain ‘neutral’ at 8.
With the announced slowdown from the company itself, it is hard to see 2024 being a prosperous year for Tesla. However, this might be a period in which it needs to recuperate, innovate, and lead the EV industry again.
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