Tesla Reports Record Quarterly Production, but Still Below Expectations

Tesla Inc. this week reported a record number of electric vehicle deliveries in a quarter. However, it still missed Wall Street estimates because of a combination of logistical challenges, softening demand, climbing interest rates, and jitters over a possible world recession.

The carmaker delivered 405,278 cars in the final three months of the year, lower than a Wall Street projection of 431,100 vehicles. Tesla had delivered 308,600 vehicles in the final quarter of 2021.

The company’s fourth quarter deliveries fell roughly 34,000 vehicles short of production forecasts due to ongoing logistical bottlenecks, following the third quarter’s 22,000 shortfall for the same reason.

Analysts have warned that Tesla faces challenges such as weakening demand in China, which is the world’s top auto market, plus stronger competition from larger carmakers such as Ford Motor Co, General Motors, and even startups like Rivian.

Tesla's stock tumbled 65% in 2022, its worst year since going public in 2010. Analysts and retail shareholders fear softening demand stemming from an uncertain economy will dent the company's pledge to grow deliveries by 50% every year. 

The company had rarely missed production targets in the past, but recent misses have resulted in market watchers speculating if CEO Elon Musk’s diluted focus, since his acquisition of social media company Twitter, has been part of the cause.