Dear Tesla (TSLA) Stock Fans, Mark Your Calendars for Jan. 2

  • Tesla (TSLA) is about to report Q4 2022 delivery results.
  • After a month of steep declines, the company needs a boost.
  • But the report will have much broader implications for the entire sector.
"TSLA stock" - Dear Tesla (TSLA) Stock Fans, Mark Your Calendars for Jan. 2

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Last year began with a bang, as Tesla (NASDAQ:TSLA) reported impressive Q4 2021 delivery results. TSLA stock surged, and investors prepared for a year of growth for the electric vehicle (EV) sector. One year later, the sector leader is gearing up to report the year’s final delivery statistics on Jan. 2, 2023, but investor sentiment has shifted.

TSLA stock has been falling for months since CEO Elon Musk turned his attention to Twitter after his October 2022 takeover. As shares have plunged, experts have slashed their price targets and issued bearish predictions for the coming year.

If Tesla can exceed expectations when it reports deliveries, it may be the boost that the stock needs. But much more is at stake than the future of TSLA as markets head into the new year. The report will likely be a bellwether for the strength of the entire EV sector.

What’s Happening With TSLA Stock?

Anticipation for the delivery report is pushing TSLA stock up today. Shares rose more than 5% this morning, although they have since come down. As of this writing, TSLA is up more than 3% for the day, though its current trajectory is somewhat volatile.

It’s not surprising that this type of news would give the stock a slight bump. However, this doesn’t mean that investors should necessarily expect the type of delivery report that will keep TSLA stock in the green. Let’s take a closer look at the upcoming catalyst in context.

Like many TSLA stock price targets, Q4 delivery expectations have been lowered over the past few weeks. While it’s possible that this could make it easier for Tesla to exceed Wall Street estimates, that doesn’t mean it will generate sustainable growth. As Barron’s reports:

“A few weeks ago, the delivery estimate was closer to 450,000 units. Analyst numbers have been coming in recently thanks to concerns over EV demand arising from a few issues including: Decreasing wait times for new Tesla vehicles, new price incentives offered by the company, as well as a delivery-guidance cut by Chinese EV producer NIO (NIO) .”

It’s important to note that the Nio guidance reductions have cast a dark cloud over Tesla as it prepares to report deliveries. The Chinese EV producer is considered one of Tesla’s top international competitors. Yesterday, it saw shares fall after announcing it had reduced its delivery expectations from between 43,000 and 48,000 units to between 38,500 and 39,500.

This is bad news for investors, as it strongly implies that EV demand in China is falling. Bad news for one of the country’s leading automakers doesn’t bode well for Tesla. It certainly doesn’t help that the company recently extended a production shutdown at its Shanghai manufacturing facility. According to the Wall Street Journal, this rare decision is the result of rising Covid-19 among Tesla’s Shanghai workers and suppliers.

The Road Ahead

Until the delivery report comes in, TSLA stock will be battling considerable uncertainty, something Wall Street hates. Even if deliveries do exceed the lowered expectations, it will still be hard for shares to rise by too much. The reduced guidance from Nio has already signaled to investors that the EV sector is likely in for a tough road ahead in 2023.

If Tesla reports disappointing or even deliveries in line with expectations, it will confirm the fears of every investor who is already skeptical. Either way, TSLA stock is likely to fall when the dust settles from the year’s final delivery report.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.

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