Tesla deliveries fall short of Wall Street expectations

Tesla's fourth-quarter deliveries fell short of Wall Street forecasts, fueling fears that weaker economic growth and rising interest rates will slow demand for the US electric-carmaker's models in 2023.

Meanwhile, Tesla's new factories in Texas and Berlin continued to ramp up production, leading to record deliveries over the past three months. The company reported Monday that it delivered 405,278 cars in the three months ended December, up 11% from the record quarter earlier. Most analysts had expected deliveries between 420,000 and 430,000.

Thanks to the late sales surge, Tesla delivered more than 1.3 million new vehicles to customers in 2022, up 40% from the year before. Elon Musk, the company's chief executive officer, earlier this year predicted that the company would hit its longer-term goal of growing shipments by 50% annually. However, as the year progressed, the company was impacted by production shutdowns in China, supply chain issues and early signs of weakening demand, prompting it to become more cautious.

According to the latest data, production exceeded deliveries by 34,423 units for the third straight quarter. The company stated that it "continued to move towards a more balanced regional mix in vehicle construction, which in turn led to a further increase in vehicles in transit at the end of the quarter," suggesting that logistics contributed at least in part to the problem could.

Throughout 2022, Tesla struggled with manufacturing and logistics issues, leading to an extended shutdown of its key Shanghai manufacturing facility earlier in the year.

But as waiting lists for the most popular vehicles dwindled towards the end of the year, Wall Street's attention shifted from supply to demand. In December, Tesla announced a $7,500 stimulus in the US for anyone who buys a Model S or Y before the end of 2022, presumably to stimulate demand, while anticipating the introduction of a $7,500 tax credit dollars waiting to buy EVs in 2023.

Musk has criticized what he sees as excessive monetary tightening to curb inflation and warned of "stormy weather" in December as rising interest rates weigh on demand.

Tesla shares fell 54% in the fourth quarter of 2022 as investors feared Musk's acquisition of Twitter would distract him and sell more Tesla shares, spelling the end of the electric-carmaker's rapid development and soaring profit margins.