Tesla Inc. shares are set to mark their best-ever start to a year, buoyed by price cuts across the electric-vehicle maker’s lineup in a bid to boost sales. Investors will soon discover if all the enthusiasm was justified.
The Elon Musk-led carmaker is expected to announce quarterly delivery and production figures in early April, providing an initial glimpse into how well the company’s strategy of chasing volume over profit margins worked.
Analysts surveyed by Bloomberg expect the Austin, Texas-based company to deliver a record 421,164 cars globally in the first quarter of 2023, up from the 405,278 it delivered last quarter.
“In recent months Tesla has pivoted from being supply constrained to being demand constrained,” Barclays analyst Dan Levy wrote in a note to clients, adding that while concerns about demand “temporarily halted when Tesla cut prices in early January, questions have resumed of late.”
The company missed delivery estimates in 2022 and claimed to still be working through logistical issues as production exceeded sales for three straight quarters last year. In the fourth quarter, it produced 34,000 more cars than it delivered, raising questions about demand.
Tesla slashed prices first in China and then in the U.S. and Europe in January. Like the rest of the auto industry, the EV leader is grappling with inflation and high interest rates that make it more expensive for consumers to finance large purchases.
The implosion of Silicon Valley Bank has also spooked the tech scene in California, a key part of Tesla’s customer base.
Other carmakers have since followed Musk’s strategy. Tesla’s cuts pushed Ford Motor Co. to lower the price of its electric Mustang Mach-E.
Even though the cuts will put a squeeze on Tesla’s profits, its stock has been on a strong rally since then. Shares have risen 59 percent this year as of Thursday’s close amid hopes the lowered prices would provide a much-needed boost to demand.