Tesla Has the Potential to Beat the Competition in 2023 as Auto Market Struggles, Says Morgan Stanley

Tesla has the potential to beat the competition. The automotive market is in a difficult position, but right now, Tesla will further increase its lead, says Morgan Stanley.

Tesla reported record quarterly deliveries of 405,278 vehicles in Q4, reflecting an increase of 31% over the same period last year. For the four quarters of 2022, Tesla delivered an impressive 1,313,851, up 40% from a year earlier. Tesla produced a record 439,701 vehicles in Q4, up 44% from the same period last year. Thus, 1,369,611 cars were produced in 2022, which reflects a 47% increase compared to 2021.

While nervous investors and analysts repeat like a mantra that Tesla missed expectations, the reality is that the company has done well despite headwinds in 2022. At the end of 2020, Tesla CEO Elon Musk said that the company would be aiming for 50% annual sales growth. He explained that the 50% growth target is a multi-year average, and some years will see faster growth, while other years will see slower growth. Since the manufacturer produces its cars when the order comes in, it is clear that the production figures are a good indicator of the real situation, as opposed to the delivery figures. Thus, in 2022, Tesla has achieved 47% growth, which is almost in line with the set annual growth target of 50%.

Given the situation and the new data, longtime Tesla bull, Morgan Stanley analyst Adam Jonas, again reiterated an Overweight rating on Tesla stock and sees “recent share price weakness is a window of opportunity to buy the global EV market leader with long-term growth potential at a more reasonable price.”

He pointed out that all car manufacturers are now in a difficult situation due to the macroeconomic conditions, and all of them will have to overcome the obstacles that will be encountered this year. However, of all of them, only Tesla has the potential to not only endure but expand its lead, as it alone has the cost and scale advantages to beat the competition, Jonas wrote.

“Between a worsening macro backdrop, record high unaffordability, and increasing competition, there are hurdles for all auto companies to overcome in the year ahead. However, within this backdrop we believe TSLA has the potential to widen its lead in the EV race, as it leverages its cost and scale advantages to further itself from the competition.”

H/t @TeslaNY/Twitter

© 2023, Eva Fox | Tesmanian. All rights reserved.

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