Tesla Stock Falls Despite Earnings Beat; Supply Chain-Woes Hamper Production

Tesla (TSLA) reported better-than expected fourth-quarter earnings late Wednesday, but the U.S.-based electric-vehicle says supply-chain issues continue to slow production. Tesla stock fell after the market close.

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Earlier this month, Tesla reported blockbuster Q4 deliveries of 308,600 vehicles, bringing its 2021 total to a record-breaking 936,172. Tesla’s fourth-quarter deliveries included 296,850 Model 3 and Y vehicles, and 11,750 Model S and X models.

The results impressed Wall Street, as Tesla appeared to manage semiconductor shortages and supply-chain issues more effectively then some rival automakers.

For now, Tesla has the enviable problem of demand outstripping supply, analysts say. Production launches in Austin, Texas, and Berlin are “key to alleviating these issues,” said Wedbush analyst Daniel Ives in a recent note to clients.

Berlin, Austin Factories

The German factory will eventually produce the bulk of Tesla’s vehicles destined for European customers, starting with the Model Y crossover SUV.

Tesla recently got the OK to produce the first 2,000 units at its Berlin factory, while it awaits a final permit for the plant.

Meanwhile, it appears Model Y deliveries from Texas could begin by the end of the first quarter, according to industry website Electrek, citing unnamed sources. The start of Model Y production at Tesla’s Austin factory is also key because of its use of a new structural battery pack and 4680 battery cells.

Those batteries, which still appear to have technical challenges, are critical to begin production of the much-delayed Cybertruck. Recent reports suggest that the Cybertruck production would be pushed back, from late 2022 to early 2023.

That’s well behind EV startup Rivian‘s (RIVN) late-2021 launch of its all-electric pickup, the R1T, and soon-to-launch electric trucks from General Motors (GM) and Ford (F).

Ford’s F-150 Lightning is expected this spring. The first GM electric Silverado, aimed at a limited number of fleet operators, is expected to hit the road in Q2 2023. A consumer version will be available in the fall of 2023. GM delivered a single high-end Hummer EV before year end.

Tesla’s production ramp-up at both the Berlin and Austin plants will likely be slow at first. But Ives believes the Berlin plant will “alleviate the bottlenecks of production for Tesla globally.” He adds that Tesla will have by the end of 2022 the overall capacity for “about 2 million units annually from roughly 1 million today.”

Tesla Earnings

Estimates: FactSet analysts expected Tesla earnings per share to nearly triple to $2.36 in Q4 vs. a year ago. Sales were seen jumping 59.5% to $17.132 billion.

Results: Tesla reported Q4 EPS of $2.54 on sales of $17.719 billion, of which $314 million were from regulatory credits.

The company said in a statement that in Q4, “factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through 2022.”

Tesla also said it’s still awaiting final approval for its Berlin plant. Additionally, it said it’s making “progress on the industrialization of Cybertruck, which is currently planned for Austin production subsequent to Model Y.”

Tesla could provide more clarity on the factory openings and a product roadmap on the earnings conference call.

Tesla Stock

Shares rose 2.1% to 937.41 stock market today. Shares fell 1% after the market close. TSLA stock traded as high as 1,243.49 on Nov. 4, but is now about 25% off that 52-week high.

Tesla’s relative strength line also has fallen significantly in the past couple of weeks. Its RS Rating is 88 out of a best-possible 99. Its EPS Rating is 72.

Among other U.S.-based carmakers with a growing EV slate, GM rose 0.9% Wednesday, Ford was down 0.4% and Rivian rose 1.1%. Lucid (LCID) tumbled 5.8%.

Among Tesla’s China-based rivals, Nio (NIO) dropped 4.7%, Xpeng (XPEV) fell 1.9% and Li Auto (Li) declined 1.3%. Warren Buffett-backed BYD (BYDDF) edged up 0.7%.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.

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