Will Tesla Thrive or Dive in 2024?
πππNew Year, New Beginnings! 2023 has been a mixed year for EV stocks.
The Top Performer has been $Tesla Motors(TSLA)$
which is up 129% in the past year. Tesla's share price has been on a roller coaster ride. From a high of USD 299.29, it dived down to a low of USD 101.81. Fortunately it has since recovered to close at USD 248.48 last Friday.
Tesla is estimated to have handed over almost 483,200 vehicles in 4Q23 according to Wall Street Analysts. That means Tesla has probably exceeded its goal to deliver 1.8 million vehicles last year. This is an all time high for Tesla.
Tesla slashed prices across its lineup in 2023, sacrificing profit margins for volume. The markdowns were especially pronounced in China, where Tesla said it is most difficult to compete.
Tesla has yet to give guidelines on how many vehicles it expects to deliver in 2024. The 2 most popular Tesla's vehicles are Model 3 sedan and Model Y sports utility vehicle. These 2 models alone account for 97% of the deliveries last year.
Tesla is also expanding its marketing efforts. It has recently begun experimenting with Google ads. One that is currently out now is about the ability to lease a Model Y for just USD 399 a month in the US.
Then there is the Cybertruck. 46 months after the official unveiling in November 21 2019,Tesla's Texas Gigafactory is finally ready for production and delivery. With an estimated 2 million preorders from Tesla's loyalists, Tesla's Cybertruck costs USD 61,000, up USD 21,000 from what it was promised 4 years ago. CEO Elon Musk said that it is Tesla's "best product ever" but it would take 12 to 18 months to be a significant positive contributor to cash flow.
According to Wall Street Analysts, Tesla's earnings maybe below 2022 levels. Tesla's valuation has been supported by growth expectations, even as margins have eroded. However a waning of the growth narrative could impact on Tesla's share price.
However Tesla is more than just an EV company. It is also into solar energy, charging infrastructure. Tesla has long term growth potential on AI, robots and full self driving capabilities. Analysts consensus has Tesla delivering 2.1 million vehicles in 2024.
With falling interest rates, the US launch of Highland Model 3 as well as Cybertrucks, these will help to buoy sales and provide steady margins. Tesla is also planning to launch a USD 25,000 vehicle to drive growth into 2025.
Wedbush analyst Dan Ives believes that Tesla's margins are in an upward trajectory in 2024. He said that the margins have now stabilised and should head back above the key 20% threshold in 2024. Dan Ives said that 2024 will be a Golden Year for Tesla. He also said that Tesla is poised to join the Trillion Dollar Club in 2024 with a Target price of USD 350 per share, an upside potential of 41%.
Will Tesla Thrive or Dive in 2024? I believe it is time for Tesla to exceed 2023 's performance and Shine!
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Good post