Tesla stock jumped 1% in morning trading.
Tesla Inc. is expected to announce record quarterly deliveries in early January but that may not be enough to satisfy investors as the electric-vehicle leader grapples with inflation, rising interest rates, crimped production in China and concerns about softening demand.
Tesla has tumbled more than 37% in December alone, extending its decline to about 65% this year and wiping out over $670 billion in market value. This marks a radical about-face for a stock that was one of the great winners of the pandemic, having surged more than 740% in 2020 on the back of booming demand and rock-bottom interest rates.
In an effort to clear inventory, Tesla offered a rare $7,500 discount to US customers who took delivery of a new Model 3 or Model Y at the end of the year, along with 10,000 miles of free Supercharging. The Inflation Reduction Act, or IRA, will restore up to $7,500 in federal tax credits for certain EVs starting Jan. 1.
Deliveries are one of the most closely watched metrics by investors eager to see if Tesla can maintain its rapid growth. Global fourth-quarter deliveries could reach 420,760 vehicles, according to 16 analysts surveyed by Bloomberg. That estimate, which doesn’t include some of the more recent analyst projections, exceeds the record 343,830 cars delivered in the third quarter.
Tesla is the world’s dominant seller of electric vehicles and is well positioned to take advantage of some of the IRA’s tax credits for battery cell manufacturing and locally assembled EVs. But in order to meet its goal to grow deliveries by 50% annually over several years — an objective Tesla warned it will fall just short of in 2022 — Tesla will likely make compromises when it comes to gross margins. Tesla has cut prices across its lineup in China and scheduled down time at its plant in Shanghai.
Investors are signaling skepticism. Tesla plunged 65% this year through Thursday’s close, more than triple the 19% decline in the S&P 500 Index.