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Wedbush reaffirmed its $225 price target for Tesla (TSLA) ahead of the maker's Q1 delivery report. The firm expects deliveries to reach around 420,000 units.
Q1 2023 will end in three days and Tesla will report the number of vehicles delivered, probably this weekend. Analysts will focus heavily on how much demand there is for the manufacturer's vehicles in this shaky macroeconomic environment. Analysts at Wedbush expect Tesla to do well and deliveries in Q1 will reach around 420,000 vehicles. However, given the macroeconomic environment, they also would not be surprised if Tesla again slightly cuts the prices of its vehicles later to stimulate demand.
“Clearly since the Model Y/3 price cuts were implemented early this year demand has been robust during the course of 1Q led by the key China region, which should enable Tesla to at least hit the ~420k bogey for the quarter with possible upside depending on logistics around deliveries this week. That said, the macro remains uncertain and we would not be surprised to see more slight price cuts around the edges both in the US and China over the coming months for Tesla to further stimulate consumer demand.”
Wedbush estimates that Tesla will report deliveries of 402,000 Model Y/3s and 18,000 Model S/Xs this quarter. In doing so, the firm expects the mix likely to be skewed on the upside for Model Y post price cuts in China and US. Wedbush believes that given the scale and scope of Tesla's production capacity, margins will not be sacrificed at the expense of volumes in Q1 with Auto GM that should be able to meet expectations.
“While the delivery bogey is now 1.8 million units globally for Tesla in 2023 it appears the trajectory so far is trending slightly above that level out of the gates in 1Q based on China and US demand post price cuts,” wrote the analysts. “The macro remains uncertain and a recession could likely be on the doorstep, however, Tesla is now positioned well with its price points with demand outstripping supply so far in 2023.”
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Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.