Overview
Despite China being a bright spot for Tesla’s sales, the electric vehicle giant is expected to see a decline in global sales due to downturns in the U.S. and Europe.
China vs. U.S. and Europe
While Tesla’s sales in China are expected to rise by over 48,000 units this year compared to last year, the U.S. and European markets are telling a different story. According to researcher Troy Teslike, the U.S. and Europe will see a drop in sales by over 30,000 units each.
The Cybertruck Effect
The highly anticipated Cybertruck is unlikely to buoy overall sales in the U.S., as the company is planning a three-day halt in production this month due to too much inventory. This pause in production will only add to the declining sales in the region.
What This Means for Tesla
For the full year 2023, Tesla delivered 1,808,581 vehicles globally. To mark a growth over last year, the company needs to deliver at least 514,926 vehicles in the three months through the end of December. However, this seems like an ambitious target, as Tesla has never managed to deliver over 500,000 EVs in a quarter before.
Third Quarter Recap
In the third quarter, Tesla reported deliveries of 462,890 vehicles, up 6.4% year-over-year and up 4.3% quarter-over-quarter. However, deliveries fell 8.5% year-on-year in the first quarter and by 4.8% in the second quarter.
Analyst Insights
According to Teslike, the low sales in Europe will likely pull down Tesla’s global delivery numbers despite a rise in China. Analysts have a consensus rating of “Buy” on the Tesla stock, with the highest price target being $411. However, the most recent analyst ratings imply a 3.5% downside.
Market Impact
Tesla stock closed at $351.42 on Tuesday, down 1.6% for the day. Year-to-date, Tesla’s shares have risen 41.5%.
Conclusion
Tesla’s expected decline in global sales is a concerning trend for the electric vehicle giant. Despite growth in China, downturns in the U.S. and Europe are weighing heavily on the company’s overall performance.