Tesla (TSLA) delivery estimates are plunging as growth story dissipates
Analysts are releasing a wave of delivery estimate downgrades for Tesla as the automaker’s growth story is dissipating – at least for the next few years.
Tesla’s stock has been performing poorly this year. It is one of the worst-performing stocks in the S&P500.
There are several different arguable reasons for that, but the main one appears to be Tesla’s dissipating growth story and the lack of a clear path back to it in the near term.
While Elon Musk likes to say that Tesla is a conglomeration of several different companies operating in a multitude of industries, its performance is almost entirely tied to vehicle sales for now.
Tesla has been growing at a roughly 50% rate per year on that front until last year, when it started to slow down.
It has been an incredible performance, but now the automaker has warned that its growth will slow this year as it is “between two waves of growth” with nothing in its lineup that can significantly contribute to its vehicle sales.
Wall Street analysts are trying to adjust to this new situation for Tesla, but they are having issues coming up with new numbers for this year and Tesla hasn’t said much.
Companies normally give clear guidance, but Tesla is an exception. For 2024, Tesla only noted that its growth rate “may be notably lower than the growth rate achieved in 2023.”
It leaves a lot of room for speculation – and Wall Street loves to speculate.
Tesla had record deliveries of 484,507 vehicles last quarter for a 20% year-over-year growth rate, and it delivered 422,875 in Q1 2023.
Now, analysts are trying to estimate how many vehicles Tesla will deliver in Q1 2024 with a few weeks left in the quarter and it hasn’t been looking good.
As of a few days ago, the consensus was 479,400 vehicles, which is slightly down quarter-to-quarter, but up significantly year-over-year, which would be expected as Tesla added production capacity at Gigafactory Texas and Berlin in 2023 – though it did had issues in Berlin this month with the factory being shut down for a week.
However, several analysts have released lower expectations in the last few days – leading to a gloomier look at the first quarter of the year for the automaker.
Deutsche Bank now estimates 427,000 deliveries in Q1, which would be a massive disappointment for Tesla.
UBS also lowered its estimate from 466,000 to 432,000 units in Q1.
Several other firms are making similar moves over the last few days – often accompanied by downgrades on Tesla’s stock. Most serious estimates now put Tesla’s deliveries between 425,000 and 435,000 units in Q1.
Tesla is expected to release its production and delivery numbers in the first few days of April.
Electrek’s Take
This is a real problem for Tesla. As I previously wrote, I think the Cybertruck was a mistake – not because it’s not a good vehicle, but because the resources spent developing it would have been better spent on a higher volume vehicle for Tesla to shorten the time between the two growth phases.
Now, Tesla is not expected to go back to a significant level of growth until 2027 based on its own estimates:
That’s a long time for what has been described as a “growth stock”.
Now, I honestly don’t know if these new lower estimates make sense for Q1. Tesla has seen lower production at Gigiafactory Shanghai due to the Chinese New Year and the shutdown at Gigafactory Berlin due to the arson attack.
On the demand side, Tesla is offering some significant discounts to sell everything it has, as usual.
Is that enough for a drop of 50,000 to 60,000 units quarter-to-quarter? I don’t know, maybe? What do you think? Let us know in the comment section below.
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US coal giant Peabody and Germany’s RWE are teaming up to develop 5.5 gigawatts (GW) of solar and energy storage projects on former mining land in the Midwest.
It’s an unlikely but strategic partnership: RWE is one of the world’s leading renewable energy developers, while Peabody was once the largest private-sector coal company in the world.
RWE is buying into R3 Renewables, a joint venture that Peabody launched alongside Summit Partners Credit Advisors and Riverstone Credit Partners. With this move, RWE is acquiring Summit and Riverstone’s stakes and taking a majority position, while Peabody will hold on to a 25% equity interest. The projects are spread across Indiana and Illinois, focusing on large-scale solar and energy storage on land that Peabody previously mined for coal.
The plan is to develop 10 projects totaling 5.5 GW. RWE will take over seven of these projects, while the remaining three will continue under a joint venture with Peabody. If all goes to plan, these projects could generate enough electricity to power more than 850,000 homes.
For Peabody, which has faced growing pressure to pivot as the world transitions away from fossil fuels, the partnership is part of a broader effort to create value from its reclaimed mining sites. Jim Grech, Peabody’s CEO, says the partnership with RWE marks “significant added momentum” for their renewable energy initiatives.
RWE sees this as a big opportunity to expand in the US Midwest. Andrew Flanagan, CEO of RWE Clean Energy, called the partnership “an exciting opportunity to invest in rural regions of Indiana and Illinois,” promising economic development through construction jobs, investment, and community benefits. The plan aims to support the energy transition while ensuring that communities historically tied to coal still see benefits – this time from clean energy.
Read more: Ørsted’s largest solar farm in the world is now online in Texas
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For years, bitcoin won by being boring.
Investors weren’t able to do all that much with it besides buy and hold it. But that was precisely why the world’s largest cryptocurrency was valuable.
It was a commodity, like gold — or corn. It didn’t get too fancy on its offerings. In fact, bitcoin’s core team of developers has intentionally moved as slowly as possible on everything that touches the base blockchain specifically to avoid breaking things. That’s why many of crypto’s more cavalier coders headed to other blockchains to tinker and do things like build decentralized applications.
The approach worked. Traders poured their money into bitcoin not just because it was the OG coin but also because the network was robust and reliable, and they knew what they were getting. As solana reported hack after hack, bitcoin didn’t really change. The asset was volatile, but aside from a major system upgrade that took four years to design and green-light, bitcoin kept its status as the world’s biggest cryptocurrency by market cap by sticking to the status quo.
But times are changing for the original coin.
Developers are increasingly building on bitcoin’s base blockchain in unexpected ways. Wall Street is also decking the coin out with all its familiar trappings such as exchange-traded fund wrappers and allowing traders to hedge positions and make leveraged bets.
In January, spot bitcoin ETFs began trading, which opened the door to more mainstream investors. Last week, options on those spot crypto products finally started to go live on the Nasdaq and New York Stock Exchange. CBOE Global Markets is also set to list its first cash-settled bitcoin ETF options Dec. 2.
Creating this new margin framework around bitcoin means that both retail traders and institutions alike will be able to get more exposure to the asset class relative to how much cash they’re investing.
New ways to bet on bitcoin
Collectively, the U.S.-issued spot bitcoin funds hold north of $100 billion in assets under management. Last week, they notched their largest weekly inflows on record, totaling more than $3.1 billion. And according to CoinShares, year-to-date net flows are up to $37 billion versus U.S. Gold ETFs, which drew around $309 million in their first year.
Nearly half of those flows into the spot bitcoin products took place after U.S. interest rates were cut for the first time in four years in September.
Vetle Lunde, head of research at K33 Research, told CNBC there has been record high open interest for futures on the CME derivatives exchange, the way most U.S. institutions currently buy bitcoin futures contracts. But a lot of traders have been waiting for options on spot bitcoin ETFs on major exchanges such as the NYSE and Nasdaq, since it enhances liquidity and offers hedging tools.
Lunde says that demand for leveraged long exposure to bitcoin and ether is climbing, with VolatilityShares’ BTC exposure hitting new all-time highs.
Galaxy Digital’s trading team told CNBC the firm has observed significant volume in BlackRock’s IBIT ETF options, the first to launch on the Nasdaq last week. BlackRock is the largest digital asset manager in the world after it eclipsed Grayscale in August. BlackRock’s bitcoin trust IBIT holds $48.4 billion in bitcoin compared with the $34 billion in its gold trust.
Options on IBIT had a blockbuster debut, with 353,716 contracts traded on its first day, according to Galaxy Digital. The firm noted that the previous most active debut of options trading was when Facebook options went live in 2012 and 360,000 contracts changed hands.
Galaxy sees notable trading activity extending out to January 2027, roughly halfway into Donald Trump’s administration. On the campaign trail, the president-elect had an about-face on bitcoin and went from criticizing digital assets to making big promises to the crypto industry. Bitcoin is up roughly 40% since Election Day, Nov. 5.
“This level of concentrated, long-dated activity reflects investor confidence in the ETF’s long-term growth potential, signaling bullish sentiment for the years ahead,” Galaxy’s trading team told CNBC.
Until now, offshore crypto native platforms such as Binance and Deribit have been the main marketplace for bitcoin derivatives trading. Galaxy told CNBC there is a noticeable volatility premium between Deribit, CME and IBIT, which could present arbitrage opportunities among the varying platforms offering derivatives trading.
On Friday, more than $9 billion in bitcoin options contracts expire on Deribit, which could lead to greater price volatility as the expiration date approaches.
“There’s a ton of leverage in the system right now,” Galaxy Digital CEO Mike Novogratz, a longtime crypto investor, told CNBC’s “Squawk Box” on Friday.
“You look at the funding rates to do crypto in our market, right? The perpetual market, as high as they’ve been, the basis is high,” Novogratz said. “The crypto community is levered to the gills, and so there will be a correction.”
Bitcoin was within striking distance of $100,000 on Friday but retrenched over the weekend. The cryptocurrency is currently trading at around $95,000.
Environment
Hyundai doesn’t care if Trump kills the EV tax credit, it plans to keep growing either way
Although President-Elect Donald Trump is promising to end the $7,500 EV tax credit, Hyundai is confident it will continue growing in the US. The company just opened a massive new $7.6 billion manufacturing plant in Georgia as it looks to grab a bigger share of the US market.
A Reuters report earlier this month claiming Trump’s transition team is planning to end the $7,500 federal EV tax credit is causing US automakers to brace for the potential major impacts.
Although US market leader Tesla reportedly supports the move, Hyundai Motor, including Kia, is preparing for any outcome.
“Hyundai did not build our [US] investment plan based on incentives; the plan was even made before Trump’s [first] term,” Hyundai’s newly elected CEO, Jose Munoz, said at the LA Auto Show last week.
In an interview with Korean media at the event (via Korea JongAng Daily), Munoz said, “If the Inflation Reduction Act goes out, it goes out for everybody, and we can even do better.” Although Hyundai’s EVs currently don’t qualify for the full $7,500 credit, like some US rivals, the company is still gaining market share.
“Competitors like Tesla step by step are losing market share and we continue to increase our share,” Hyundai’s current global chief operating officer explained.
Hyundai to remain flexible if Trump ends the EV tax credit
Hyundai opened its massive new $7.6 billion manufacturing plant in Georgia last month. The first vehicle that rolled off the assembly line was the new US-made 2025 Hyundai IONIQ 5. Hyundai upgraded its top-selling EV with more range, features, and a sleek new design. It also comes with an NACS port to charge at Tesla Superchargers.
Last week, the company also unveiled its first three-row electric SUV, the IONIQ 9, which will also be built at the facility.
However, until the battery unit opens next year, Hyundai’s US-built EVs qualify for a partial $3,750 credit. Until then, Hyundai is passing on the full $7,500 for leases.
Hyundai fast-tracked production to level the playing field in the US, its most important market. With Trump reportedly planning to end subsidies, Hyundai’s new CEO said the company will remain flexible.
“We will not only produce EVs but also hybrids and extended-range EVs at our plants, and therefore, the key for us is flexibility and then being able to adjust to what the customers want,” Munoz told reporters.
As the US is expected to pull back, China’s EV market continues surging. China became the first country to build over 10 million new energy vehicles (EVs and PHEVs) in a single year.
EV leaders, like BYD, are looking overseas to drive growth as a wave of low-cost rivals is hitting China. As sales continue surging, BYD is quickly catching up to Ford in global deliveries.
Munoz said, “China is a big threat,” but he believes Hyundai can compete with “technological prowess” and “quality.”
“A lot of consumers, when they buy Chinese products, they realize maybe the quality is not as good as others,” Hyundai leaders explained. That’s where Hyundai wants to “elevate our game in terms of providing not only the best quality but also the best services to our customers.”
Hyundai Motor, including Kia and Genesis, is outpacing Ford and GM as the second-largest seller of EVs in the US through September. With US production kicking off, Hyundai aims to solidify its spot in the US auto market.
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