A Tesla (TSLA) vehicle was the globe's bestselling car in the first quarter of 2023 as Chief Executive Elon Musk recently hinted new Tesla products are coming, that he is open to advertising and confirmed a Cybertruck delivery event will take place this year.
The Tesla Model Y was the world's bestselling vehicle in Q1, according to data compiled by industry analyst JATO Dynamics for Motor1. The Model Y had 267,200 sales in Q1, according to data from 53 markets and estimates for the rest of the world.
The result comes as Tesla has cut Model Y prices early in 2023.
Meanwhile, Tesla held its annual shareholder just days after Musk announced there will be a new person heading up Twitter, signaling to TSLA investors he will have more time to spend on the global EV giant.
During the gathering, Musk announced a spur-of-the-moment decision to possibly change Tesla's advertisement strategy.
The decision marks a change of heart as Musk has for years suggested Tesla does not need to advertise.
"Tesla does not advertise or pay for endorsements. Instead, we use that money to make the product great," Musk said in a 2019 tweet.
While Musk did not announce any new products, saying "this is not the time," the Tesla CEO did say there are two projects in the pipeline.
He also shot down rumors he is stepping down from his role as Tesla CEO.
Almost single-handedly, Musk has turned the auto industry on its head, essentially forcing it to get aboard the electric-vehicle train.
It's a reason why Tesla has been a monster stock over much of its history, especially during its stratospheric run from mid-2019 to late 2021. The stock hit a bear market low of 101.84 on Jan. 6, but roared back until Q1 earnings.
On April 19, Tesla reported a big first-quarter earnings decline while revenue missed views. Profit margins for the global EV giant also fell below 20% as the company executed an aggressive price-slashing strategy in the first part of 2023.
Tesla reported revenue increasing 24% to $23.33 billion with EPS of 85 cents, a 20% decline compared to 2022.
The EV company's total gross profit came in at $4.5 billion, with Tesla's profit gross margin at 19.3%, down from 23.8% in Q4 and 29.1% a year earlier.
Auto gross margins excluding regulatory credits and leases skidded to 18.3% from 23.8% in Q4. That is below the 20% gross margin "floor" Tesla had previously targeted.
On the back of price cuts, the average Tesla vehicle selling price in Q1 was around $46,000, according to FactSet estimates. That's down from $51,400 in the fourth quarter and $52,100 a year ago.
Musk told analysts Tesla is "comfortable" with its 2023 production target of 1.8 million. However, he downplayed the 2 million production number he used at the end of Q4.
"These are volatile times," Musk said. "From a production standpoint, if things go well, we've got a shot at 2 million vehicles here. But that is the upside case."
However, TSLA could experience IRA benefits equal to as much as 9% to EPS in fiscal year 2023, according to Jonas. The analyst said that number is around 2.3% for General Motors (GM) and 2.4% for Ford (F).
Is Tesla Stock A Buy?
TSLA jumped 7.2% to 193.17 last week, riding Friday's 4.7% pop in heavy volume. TSLA has formed a cup base with a 207.89 buy point. The pattern could also be read as a double-bottom base, but the buy point remains the same.
The stock has consolidated just below the 200-day line the entire time. However, the 200-day line is now right at the 200 level, below the buy point. A breakout would be valid, with a decisive drop below the 200-day line as a place to exit.
Tesla stock is signaling a move above the 200-day line and 200 level.
The EV giant is up 17.6% in May and has advanced 80% from a January low. On May 19, TSLA advanced above the 50-day moving average, hitting 181.85.
Tesla stock surged 5.5% to 170.06 on May 5, snapping a four-week losing streak. Tesla stock had been on pace for a fifth straight weekly loss, which would have been the longest losing streak since March, 2021. After Musk announced on May 11 there would be a new Twitter CEO, TSLA popped 2.1% to 172.08.
Tesla stock ranks fifth in IBD's Auto Manufacturers industry group, with Ferrari (RACE) setting the pace. TSLA has a 67 Composite Rating out of 99. The stock also has a 28 Relative Strength Rating. The EPS Rating for Tesla stock is 93 out of 99.
The market status is showing a "confirmed uptrend." Tesla stock has formed a valid base but TSLA is not a buy right now. However, Tesla stock is signaling a move above the 200-day line and 200 level and is approaching its current buy point.
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