Tesla’s production in China saw a decline in January compared to December, leading to concerns on Wall Street about the company’s first-quarter deliveries in 2024. While Tesla does not disclose monthly or regional sales numbers, according to Citi analyst Jeff Chung, the Shanghai plant shipped 71,447 cars in January, marking a 24% decrease from the previous month. However, it is important to note that January is typically a slower month for the car industry.
In the Chinese market, overall sales of new energy vehicles (NEVs) dropped by 38% from December, with battery electric vehicle (BEV) sales seeing a decline of approximately 46% month over month. On the other hand, when considering year-over-year figures, Tesla’s sales witnessed an 8% increase while NEV sales rose by 76% and BEV sales increased by around 50%.
Although Tesla’s performance falls short when compared to the broader Chinese market, investors seem to be satisfied with the modest year-over-year growth. As a result, Tesla’s stock experienced a 1.9% increase during midday trading, outperforming both the S&P 500 and Nasdaq Composite, which had slight movements in the opposite direction.
It is worth noting that Tesla’s stock has been under pressure at the start of 2024, declining by approximately 24% so far this year. This downward trend is partly attributed to lower sales and earnings estimates. Analysts on Wall Street now predict that Tesla will deliver around 480,000 units in the first quarter, with projected earnings per share of 68 cents. These estimates have been revised downwards from previous projections of approximately 495,000 units and 80 cents per share.
Despite setting a record in the fourth quarter of delivering 485,000 units, surpassing expectations for that period, it is becoming increasingly unlikely that Tesla will surpass this achievement in the first quarter of 2024.
Overall, Tesla’s performance in the Chinese market poses challenges for the company, with fluctuations in production and sales affecting investor sentiment. However, as the first quarter progresses, it will be crucial to monitor whether Tesla can overcome these obstacles and regain momentum.
