You’re here (TSLA) is once again cutting vehicle prices and offering incentives to lure consumers just days after reporting worse-than-expected first-quarter vehicle deliveries as analysts cut their profit forecasts for the entire year. Shares of TSLA rose early Thursday.
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The global electric vehicle giant on Thursday slashed prices of Model Y vehicles in Australia by up to more than 9%, bringing the base price down to around $42,240. It comes as Australia’s electric vehicle market hit a new monthly high in March with more than 10,000 vehicle sales. Tesla is the sixth best-selling car brand in Australia, according to the Australian Federal Chamber of Automotive Industries.
Tesla’s price cuts in Australia follow the company’s April 3 decision to announce 0% financing for new Model 3 and Model Y orders in China. The incentive runs until the end of April and is Tesla’s first interest-free promotion for China, the world’s largest electric vehicle market.
Meanwhile, Tesla increased its prices in the United States for all versions of the Model Y on April 1. Tesla increased prices for European Model Y vehicles on March 22. In China, Tesla also raised prices for its entire Model Y lineup by about $690 on April 1, even as some incentives expired.
However, Tesla continues to enjoy deep discounts on in-stock Model Y vehicles in the United States and other markets.
Tesla Changes Prices After First Quarter Delivery Announcement
Tesla stock edged up 1.2% to 170.44 during the period. market action THURSDAY. On Wednesday, TSLA rebounded 1% to 168.38. Earlier this week, Cathie Wood purchased a total of 319,000 Tesla shares in consecutive trading sessions, according to daily trading information.
To maintain sales momentum in 2023 into 2024, Tesla has aggressively reduced vehicle prices and offered discounts. As a result, automotive gross margins, which peaked at 30% in the fourth quarter of 2021 amid an industry chip shortage, have fallen well below 20%.
HSBC on Wednesday lowered its price target on Tesla to 138 from 143 and maintained a reduced rating on the shares. The company added that Tesla has cut prices by 9% on average since the start of the year, but that cheaper cars don’t necessarily lead to higher volumes.
The recent pricing maneuvers follow Tesla reporting global deliveries of 386,810 in the first quarter, undercutting even the lowest estimates and marking the lowest quarterly figure since 344,000 in the second quarter of 2022. The result was heavily criticized by both bulls and bears, calling the quarter a disaster. . Tesla blamed the first quarter’s performance on ramping up production of the updated Model 3 as well as factory closures.
EPS forecast for the full year, but for the second quarter?
With the first quarter over, analyst consensus now estimates that Tesla’s 2024 earnings are significantly below the 2023 level. This signals another year of declining earnings for this growth stock. Wall Street currently expects Tesla earnings per share to be just $2.78 in 2024, according to FactSet. That would represent a drop of more than 10% from last year’s $3.12.
Wall Street’s 2024 consensus EPS estimates for Tesla are now down more than 26% since the end of 2023. As Tesla reports earnings on April 23, Wall Street is likely just starting to trim its earnings forecasts. Some analysts believe earnings could fall further, potentially around 2021 EPS of $2.26.
Longer term, Wall Street consensus estimates that Tesla’s EPS in 2025 will be $3.82, up from $5.29 at the end of 2023, according to FactSet.
However, with Q1 deliveries completed, Tesla’s operations are expected to resume in Q2 with an increase in Model 3 and Cybertruck sales in the United States. Sales in China could recover after a seasonally slow first quarter, even as competition has intensified around the world. the largest market for electric vehicles.
Wall Street is currently forecasting deliveries of 498,000 units in the second quarter.
Tesla shares plunged in 2024, but at least it’s cheaper, right? No
Tesla Stock Performance
Last week, Tesla stock rose 2.9% to 175.79, posting a second consecutive weekly gain as the electric vehicle company began rolling out its latest Full Self-Driving (FSD) update to client. TSLA shares are trading below the 50-day moving average.
Emails sent by Elon Musk have leaked on social media platforms, showing that he is making it mandatory in North America to install and activate the latest version of FSD on vehicles and that he is taking customers do a “short test drive before returning the car”.
Tesla is also offering a free one-month trial of FSD in the United States for new purchases or existing FSD-enabled electric vehicles.
On March 15, Tesla stock fell 6.7% to 163.57, hitting new 2024 lows and levels not seen since May 2023. TSLA fell about 13% in March and is the the biggest loser in the S&P 500 index so far in 2024.
The electric vehicle giant ranks eighth in the 35-member IBD. Automotive Manufacturers Industry Group. The stock has a 31 Composite score on a best possible 99. Tesla stock also has a 10 Relative Strength Rating and a 67 EPS rating.
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