Last year was a tough one for the electric vehicle (EV) industry in general and Tesla (TSLA) in particular. Will TSLA’s Q4 results on Wednesday shine new light on EV innovation and pricing-related consumer acceptance?
Will Tesla’s recent price cuts represent a trial balloon—or a watershed moment for hesitant U.S. electric vehicle (EV) buyers?
Where will heavy-duty EV truck growth land in ’23 after Washington’s help?
Alex Coffey, Trading Strategist, TD Ameritrade
Leave it to Elon Musk to make potentially sector-changing news at Tesla (TSLA) mere days before its Q4 earnings report arrives tomorrow. Its dramatic price decrease across Tesla’s product line came despite another tough year for electric vehicle (EV) manufacturers and the auto industry as a whole—yet so far, Wall Street likes what it sees.
The Wall Street Journal, citing FactSet on Monday, indicated that 64% of analysts following TSLA have declared “buy” or “overweight” ratings on the stock, the most since 2014.
Will some of that enthusiasm rub off on TSLA’s closest EV rivals Rivian (RIVN) and Lucid Group (LCID) when they report in February (more below)? Tune in after Wednesday’s close.
After a year with so much discussion about Tesla (TSLA), which arguably had more to do with the activities of Musk and Twitter (TWTR), the world’s largest EV maker has definitely accelerated news going into its earnings announcement and call, including:
Analysts expect Tesla’s Q4 top- and bottom-line results to climb more than 30% for the quarter year over year, though many investors might want to see what these steep price cuts do to the automaker’s future margins. According to Zacks Equity Research, TSLA has beaten consensus earnings estimates each of the past four quarters.
State of the prospective EV car buyer: Even with the record-setting Kelly Blue Book price for a new conventional U.S. automobile at $48,681 as of year-end 2022, Tesla faces several challenges converting U.S. mass-market auto customers to EV ownership, despite its price cuts. Here are two:
How commercial EV development may expand: PepsiCo (PEP) said last year it plans to add 100 heavy-duty Tesla Semis in 2023 for California deliveries to major retailers like Walmart (WMT) and Kroger (KR) and invest in TSLA’s own charging technology at its facilities. Rivian’s EV delivery van deal with Amazon is ongoing but mainly for smaller deliveries. Investors may want to listen for:
Where the economy comes in: On February 1, the Federal Open Market Committee (FOMC) is expected to announce a 25-basis-point hike in the fed funds rate, matching its March 2022 increase, according to the CME FedWatch Tool. On the macroeconomic front, see if Tesla’s executives address:
And yes, there might be one final elephant in the room investors might want to hear about: Musk’s leadership of TWTR and how it’s affecting TSLA. Depending on how that question gets answered, it could grab plenty of headlines.
Here’s a review of key numbers to keep in mind as U.S. EV firms report:
Scheduled report date: Wednesday, January 25, after the closing bell
Rivian Automotive (RIVN)
Scheduled report date: Tuesday, February 28, after the closing bell
Lucid Group (LCID)
Scheduled report date: Tuesday, February 22, after the closing bell
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