Tesla car sales are growing more slowly than expected, raising concerns

Tesla said on Monday that deliveries in the final three months of the year rose 18% from the previous quarter, disappointing Wall Street analysts and increasing pressure on Elon Musk, the company’s chief executive, to focus on making cars rather than on the Twitter redesign.

Tesla said it delivered 405,000 electric cars from October to December. Wall Street analysts had forecast that Tesla would sell about 420,000 vehicles, up from 343,000 vehicles in the third quarter.

The company has sold a total of 1.3 million cars in 2022, a 40% increase over the previous year. That was below the 50 percent annual growth target Tesla has set for itself.

While the increases were impressive by auto industry standards, Tesla has become the world’s most valuable automaker, growing at the breakneck pace more often associated with Silicon Valley tech companies.

In recent months, Tesla has appeared vulnerable to competition from established automakers and rising borrowing rates, which have made its electric cars more expensive for borrowers. Indications that Tesla was mortal contributed to a 65 percent 2022 Tesla stock decline and led investors to focus more on conventional measures like sales and earnings rather than dreams of world domination.

Fourth-quarter deliveries were below analysts’ estimates, who had already lowered their expectations, and less than Tesla executives had suggested just a few months ago. Tesla said it produced 440,000 cars in the quarter, 34,000 more than it delivered, suggesting that supply chain problems and manufacturing problems were not the main explanation for the disappointing sales.

Martin Vieja, Tesla’s head of investor relations, said on Twitter that the gap between deliveries and production reflects vehicles in transit to customers.

There was no trading in New York on Monday due to the New Year holiday. But the numbers are likely to reinforce investor concerns that Mr. Musk is too focused on Twitter, which he acquired in October.

“There’s no sugarcoating this,” Gary Black, managing director of the Future Fund, an investment fund, said on Twitter. He predicted that analysts would cut their estimates for Tesla’s sales and earnings in 2023. Tesla will report its 2022 earnings on January 25.

Last week, Mr. Musk tried to reassure Tesla employees by telling them not to get fixated on the stock price and repeating claims that the automaker will become the most valuable company in the world, Reuters reported.

China, the world’s largest auto market, is a big focus of investor concern. A sharp rise in Covid cases in China has weighed on demand and forced the company to periodically halt production at its largest factory in Shanghai.

In addition, Chinese manufacturer BYD is outpacing Tesla in electric vehicle sales in China, casting further doubt on Mr. Musk’s ability to achieve global dominance in the auto industry.

Tesla’s sales growth outpaces every major competitor in percentage terms. The company is also among the world’s most profitable automakers and is expanding new factories in Texas and Germany.

But the company faces more intense competition from traditional automakers such as Ford, General Motors and Volkswagen. These companies have decades of experience mass-producing low-cost vehicles, and some investors believe these automakers could catch up to Tesla faster than expected.

Tesla also faces softening consumer demand, in part due to rising interest rates. Waiting times for Tesla models have shrunk, and the company has cut car prices in China and offered incentives to buyers in the United States.

Car buyers, especially left-leaning, environmentally conscious consumers who tend to buy electric cars, also seem to be turning away from Tesla because of Mr. Musk. His erratic behavior on Twitter and heated rhetoric on the social media platform have the conservatives liked it and Silicon Valley executives but outraged other people.

Daniel Ives, an analyst at Wedbush Securities who implored Mr. Musk to focus his energy on Tesla, said fourth-quarter deliveries were decent given the difficult economic environment. “We believe this was a relatively good performance,” Mr Ives said on Twitter.

Tesla’s sales could get a boost after its cars became suitable for federal incentives is Jan. 1. A new law removed the limit on the number of vehicles from each manufacturer that qualify for tax credits of up to $7,500. Tesla had exhausted its quota.

Tesla vehicles produced at the company’s factories in Texas and California also meet the requirement that the vehicles must have been manufactured in the United States, Canada or Mexico to qualify for the credits.

Mr. Musk, a prolific Twitter user, did not immediately respond to Monday’s delivery numbers. On Sunday, he wished his followers a “great day 1 2023”, adding: “One thing’s for sure, it won’t be boring.”

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