Tesla stock falls as electric car maker throws ‘curve balls’ at bulls

Tesla Inc. shares traded at its lowest level since October on Thursday, as investors looked past solid quarterly results to worry once again about the electric carmaker’s timelines, promises and restrictions on production.

Tesla stock TSLA,
-11.55%
closed at 11.6% to $ 829.10 for its lowest closing time since October 14, when it closed at $ 818.32, and the biggest drop in percentage in one day since a drop of 21% on September 8. 2020. Share losses drew the company’s market value to about $ 832 billion.

Late Wednesday, Tesla reported fourth-quarter earnings well above the Wall Street consensus, and shares fell immediately after the release, as the company revealed that its factories have been running out of capacity for several months due to supply chain problems.

However, the stock turned the course as CEO Elon Musk tried to allay these production concerns, saying he sees production growth “comfortably” above 50% by 2022.

However, he kept an eye out for short-term issues and spent much of the time-plus conference call talking about driverless Teslas he promised at the end of this year, a potential fleet of robot axes and the Tesla humanoid robot unveiled in August.

About 12 hours after the results, some analysts were saddened by the lack of detail.

The results threw a couple of “curveballs” against Tesla bulls, Jeffrey Osborne of Cowen said in a note Thursday. Musk’s’ ‘rant’ on (Full Self Driving) brings flashbacks back to ’19, when 1 million robot axes were promised by YE20, “he said.

Tesla shares “tend to work best when something new comes along,” Osborne said. Meaningful production of its new vehicles, such as the Cybertrucken and the commercial electric truck, has been pushed to 2023, and there is no “Model 2”, a cheaper EV around $ 25,000, under development, he said.

Investors had high expectations that Tesla would discuss their product roadmap over the next year plus, said analyst John Murphy with B. from A. Securities in his note. Instead, the outlook for 2022 and beyond was “relatively vague.”

Tesla’s production growth guidance was “encouraging” but somewhat confusing as Tesla continued to stress that supply chain challenges remained a constraint, Murphy said.

“In addition, we expected that (Tesla) within its 2022 outlook could provide more details about the start of production and expected ramp timeline in its Austin and Berlin facilities, but not much final guidance was provided beyond the current status of both factories, which was disappointing. “

Others were more optimistic. Tesla’s “long-term history is intact,” Adam Jonas told Morgan Stanley. Tesla is on its way to being a 10-factory company that produces as many as 1 million vehicles per year. factory in 2030, he said.

The call strengthened Tesla’s focus on scale as it increases capacity at its five factories, said Ben Kallo at Baird.

Musk highlighted “more technological advances,” he said. “Although these have been discussed in the past, the comment seemed to indicate that some were closer to commercialization than before. We remain buyers.”

While Tesla reiterated “optimism” about its full-self-driving driverless system, analyst Mark Delaney at Goldman Sachs said he and colleagues remain “guarded over
how quickly the company can achieve full autonomy given the delays in the industry
wide (including Tesla) have encountered historic on (autonomous vehicles).

The lack of progress on a $ 25,000 EV could raise questions about Tesla’s growth next year as other electric cars around that price hit the market, Delaney said. For now, however, Tesla can count on “significant growth ahead with its current models,” he said.

Tesla’s results were “strong, but not a blowout”, Toni Sacconaghi said with Bernstein in his note. “Elon Musk’s long awaited product update was a bit of a disappointment,” he said.

And despite Tesla executives’ emphasis on FSD, full self-driving has “and will likely continue to take longer to deliver than Tesla thinks, due to technical and legal reasons,” Sacconaghi said.

Tesla shares have outperformed the broader index over the past 12 months, with the share now falling 0.8% compared to gains of around 17% for the S&P 500 index SPX,
-0.54%
over that time.

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