Tesla Just Reported Record Q1 Deliveries. Why Is TSLA Stock Down?


  • Tesla (TSLA) just reported record deliveries for Q1 2023 but fell short of estimates.
  • Unfortunately for investors, TSLA stock is still falling on the news.
  • It seems that Elon Musk’s price cuts haven’t been the growth driver Tesla needs.
TSLA stock - Tesla Just Reported Record Q1 Deliveries. Why Is TSLA Stock Down?

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This week isn’t off to a good start for Tesla (NASDAQ:TSLA). Many eyes were on the electric vehicle (EV) leader as it geared up to report deliveries for the first quarter of 2023. However, the numbers are in, and they aren’t ideal. Although Tesla’s deliveries have risen since the same period one year ago, they are still below the expectations set by some analysts. As a result, TSLA stock is falling today as the market reacts to this news.

It doesn’t bode well for Tesla’s future that the fact that the company’s reported growth hasn’t been enough to override the slight deliveries miss. Investors have been watching carefully since Elon Musk slashed Tesla prices in recent months. Now they know it has been a gamble that did not pay off.

Does this mean that the entire EV market is in trouble? Not necessarily. Let’s take a closer look at Tesla’s news and assess what investors should be watching for.

TSLA Stock Post Deliveries

Since markets opened, TSLA stock has been gradually trending downward. As of this writing, it is down more than 6% for the morning and shows no signs of changing course. It hasn’t been a great month for the stock, which has been highly volatile but remains in the green by a slight margin. But despite its rebound as the year began, TSLA has still lost considerable ground over the past six months.

If Tesla had blown past Wall Street delivery estimates, it might have ushered in the turnaround that the company needs. But since it did not, things don’t look good. The company delivered 422,875 EVs during Q1, falling to meet the analyst mark of 430,008. While that isn’t a large miss, it’s certainly not something investors should disregard. CNBC reports that “deliveries are the closest approximation of sales disclosed by Tesla and are not broken out by individual model or region.”

What investors should take from this is that Tesla still has a difficult time selling cars. When the company slashed prices earlier this year, it triggered what has become known as the EV price war. As a method of driving sales, it made sense. However, competition from other automakers isn’t slowing down, making it more challenging than ever for Tesla to move the cars it builds. As The Guardian reports, even posting record quarterly deliveries didn’t “supercharge” sales, nor did it give TSLA stock the boost it needed. Tesla needed to show investors that it is still leading the EV race, but its Q1 deliveries demonstrated that it is having a harder time than ever keeping up. That will likely be disconcerting for investors as TSLA stock struggles against the industry’s mounting macroeconomic headwinds.

Tesla Isn’t Out of Power Just Yet

This doesn’t mean that Tesla is down and out. The company has pulled off surprise come-from-behind victories before. However, it’s important to note that some investors may be skeptical after this deliveries miss. These results align with a February 2023 prediction from InvestorPlace’s Louis Navellier, who didn’t think that price cuts could save TSLA stock. In his words:

“Tesla will probably continue to see its margins continue to erode. If demand keeps falling, and more competitors fight back with their own vehicle price cuts, the spread between Tesla’s profitability and the profitability of other automakers could narrow at a rapid pace.”

Given how TSLA stock has performed since the Q1 deliveries update, Navellier’s hypothesis seems correct. Slashing prices won’t save a company when its competitors can better scale their operations and offer better products.

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 InvestorPlace.comPublishing 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.

Article printed from InvestorPlace Media, https://investorplace.com/2023/04/tesla-just-reported-record-q1-deliveries-why-is-tsla-stock-down/.

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