Tesla can look back on a successful year in 2023. However, the company now has to focus on overcoming some hurdles.
• Tesla breaks delivery record in 2023
• Tesla’s biggest challenge: everyday shoppers
• Sales should be increased in the future
Tesla with delivery record in 2023
In 2023, the US electric car manufacturer was able to enjoy some successes. Tesla delivered a total of 1,808,581 vehicles in 2023. That’s almost 500,000 more vehicles than the year before, marking a new delivery record for the company. And Tesla shares also went up last year. Overall, the company’s paper gained almost 101 percent in 2023. On January 24th, Tesla will publish its financial results for the fourth quarter and for the entire year 2023, then it will be shown how sales and profits have developed.
Tesla’s biggest challenges
After a successful year in 2023, Tesla now faces some challenges. For the coming phase of growth, Tesla needs to win over those who choose their cars primarily based on price and ease of use – the everyday buyer. Chief Financial Officer Vaibhav Taneja commented on this during an investor call in October, according to Fortune: “In general, we are looking to target the next group of electric vehicle users when we look at car purchasing.”
In order to reach this target group, the company led by jack-of-all-trades Musk has to overcome a number of hurdles. Inflation and high interest rates have led to consumers becoming increasingly cautious when making large purchases, explains Fortune. In addition, some buyers still have questions about safety and whether there are enough charging stations. What’s more, those who ultimately decide to switch from gasoline-powered cars to EVs also have an ever-increasing selection of electric vehicles to choose from, in addition to Tesla.
In 2023, Tesla took various measures to appeal to a broader market. For example, the company lowered prices across its entire product portfolio, sacrificing profit margins in favor of higher sales volume. The most significant price reductions were recorded in China, which according to Elon Musk is considered the market in which it is particularly difficult to compete. Tesla is still being outperformed by its Chinese competitor BYD, which has a fresher lineup. Tesla’s latest vehicle, the futuristic-looking Cybertruck, has still not reached series production and is still at least a year away from profitability, as Musk explained in October. Analysts estimate that the automaker likely delivered between 200 and 5,000 Cybertrucks in the quarter, according to Fortune.
What analysts expect for Tesla in 2024
Analysts are predominantly optimistic about Tesla. But even if Deutsche Bank, Morgan Stanley and Piper Sandler, for example, remain confident, some of the experts also point to challenges for the US company. Bernstein in particular is cautious with his outlook for Tesla and predicts a “tough” year for the electric car manufacturer, as Yahoo Finance reports. Bernstein analyst Toni Sacconaghi recently warned that Tesla shares could fall by almost 40 percent as margins come under pressure and demand is “disappointing.” While Deutsche Bank, Morgan Stanley and Piper Sandler rate Tesla shares as “Buy” or “Overweight”, Bernstein has an “Underperform” rating.
There is still no forecast regarding deliveries for 2024. The two models that accounted for about 97 percent of the company’s deliveries this year – the Model 3 sedan and the Model Y sport utility vehicle – were first launched in 2017 and 2020. “We are struggling to understand how underlying demand will materially improve given an aging product lineup and no incremental price reduction as competition increases in the electric vehicle space,” Sacconaghi said in a research note to clients, according to Fortune. “It is equally important that we do not expect the situation to improve in 2025.”
Tesla wants to improve its sales in the future
In order to increase sales in the future, Tesla will have to take various measures, as Fortune explains. In 2023, the Model 3 sedan’s design was revised to give it a sleeker appearance and extended range. The vehicle was initially launched in China before being offered on the European market. The facelifted Model 3 is also expected to be available in the US in 2024, although the exact timing has not yet been confirmed by Tesla. Additionally, the company is reportedly planning to introduce a new version of the Model Y at its Shanghai factory.
Tesla is also expanding its marketing efforts, although the company has so far built impressive brand awareness without traditional advertising. Recently, Tesla has started experimenting with Google ads. A recent ad promotes the ability to lease a Model Y for $399 per month.
Owuraka Koney, managing director of Jennison Associates, a company invested in Tesla, expressed the belief that the electric vehicle maker is actively working to appeal to the next wave of potential customers, according to Fortune.
The introduction of the Cybertruck is drawing curious buyers to Tesla showrooms. In addition, Koney emphasized that in addition to Elon Musk, other executives such as head of design Franz von Holzhausen and vice president of vehicle technology, Lars Moravy, are increasingly committed to the company to promote the marketing of Tesla products.
Koney said: “If you look at global electric vehicle sales, BYD and Tesla are still the main players driving the volume. Tesla will continue to be well positioned in the future.”
It remains to be seen how 2024 will actually develop for Tesla.
Editorial team finanzen.net
This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.
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