Tesla (TSLA) is facing increased scrutiny as it maneuvers through market fluctuations and prepares to report its fourth-quarter vehicle deliveries, anticipated to set new records. With the end of the quarter approaching, analysts predict the electric vehicle (EV) giant will see 515,000 unit deliveries, which would represent year-over-year growth.
Recent data reveals Tesla’s insurance registrations in China—a good indicator of vehicle deliveries—totaled 17,600 for the week of Dec. 16 to Dec. 22, down around 5% from the previous week. Nonetheless, the company’s registrations are up 12% compared to the third quarter, presenting optimism for the upcoming delivery numbers analysts eagerly await.
Since Donald Trump's election win, TSLA has enjoyed approximately 80% gains, leading some analysts to believe this trend mirrors not just stock performance but broader speculative investing, treating Tesla shares similarly to cryptocurrencies. Even as the company has confirmed it expects "slight" growth for 2024, analysts have expressed concerns over meeting delivery expectations due to lagging sales metrics from the U.S. and European markets.
Barclays has noted the disconnect between TSLA's stock performance and its fundamentals, indicating the focus on short-term gains has overshadowed underlying operational challenges. They have described current market conditions as unusual, saying, “a light near-term volume miss would likely do little to dampen TSLA's rally, bolstered by speculation surrounding autonomous vehicle developments and Trump's administration.”
Alongside its registered declines, Tesla must deliver at least 514,925 units to achieve its target before the year closes. Historically, Q4 delivery achievements could break previous records, but its forecast appears ambitious compared to earlier successes; previous quarterly records hovered around 484,507 vehicles sold.
Despite promising signs, the company’s broader market outlook remains complex. Kevin George, a seasoned investor, cautioned potential buyers by stating, "I recommend selling Tesla, Inc. stock due to poor performance, political risks, and overvaluation." He characterized shares as being buoyed by fleeting investor sentiment rather than solid financial backing, pointing out concerns about the sustainability of such rapid share price growth.
George's comments reflect prevailing uncertainty about Tesla's international performance as well, especially relating to sales. His analysis cited notable declines, particularly within Europe—indicating concerns about the approach Tesla might need to adopt amid increasingly polarized political views surrounding its CEO and operations.
Tesla's significant P/E ratio of 120.7 presents another concern amid skepticism around over-inflated stock prices. Coalescing these thoughts, he emphasizes, "It is starting to look like Musk needs China more than China needs Musk, and his political affiliation may still see him lose more than he wins." Such remarks critique the potential vulnerability of Tesla’s operations should geopolitical tensions rise, especially with U.S.-China trade interactions on the horizon.
Meanwhile, TSLA shares fluctuated during recent trading, falling 0.8% to 459.30 after experiencing sporadic success earlier this year, including reaching record highs of 488.54. Even recent peaks didn’t guarantee long-term stability as some analysts suggest the stock may require additional consolidation before moving forward.
Market sentiment remains divided, with TSLA holding on to approximately 13 Listed Buy ratings, 12 Holds, and 9 Sell recommendations—painting the stock as a consensus Hold at present. Unfortunately, anticipated losses projected around 35% may dissuade confidence from potential stakeholders moving forward.
All eyes are on Tesla as it embarks on this pivotal quarter, attempting not just to shatter existing delivery records but also to solidify its position within the intricately woven fabric of global economics and market speculation. The stakes have never been higher for the electric vehicle leader as it navigates cultural sensitivities and performance metrics set against broader political contexts.
