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Jefferies raises estimates on Tesla following 4Q volume report

There have been no significant changes in the reported 4Q volume, but it’s worth mentioning a surprising decrease in leasing adoption and better-than-anticipated “Other model” deliveries. This could indicate more seamless ramp than initially anticipated in the implementation of 4680 batteries or the production of the Cybertruck.

Total deliveries reached 484,507 units, marking a 20% YoY increase and surpassing the third quarter by 11%, 0.8% higher than consensus estimates. For the full year, deliveries amounted to 1,808k, reflecting a 37% rise, meeting Tesla’s set target.

Initial expectations of increased sales due to last-minute reductions in purchase incentives in the US and Europe did not translate into a significant beat, with Model 3 and Y deliveries reporting In-line with expectations. Meanwhile, production hit 494,989 units, up 13% year-on-year and 15% above the third quarter figures, resulting in improved overall utilization.

Production of Models 3 and Y once more surpassed deliveries, this time by 15.2k units (compared to 35k in the last four quarters) following a minor reduction in inventory in Q3.

By contrast, there were 4,757 more “Other Models” (which Tesla did not specify between Cybertruck and S/X) delivered than produced in 4Q, which could mean either a big reduction in S/X inventory at the year’s end, conflicting with a 51% drop in estimated October-November US registrations, or possibly higher-than-expected Cybertruck deliveries in December, potentially surpassing 5k units, despite only 10-12 units reported on November 30th.

“High deliveries of Cybertrucks in Q4 may not help 2023 profitability and we continue to see the vehicle as Off-Mission. Still, it would suggest an earlier or smoother ramp manufacturing 4680 cells or trucks than feared.” Wrote analysts at Jefferies in a note.

Shares of TSLA are down 1.33% in pre-market trading on Wednesday.

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