Tesla is expected to set a new sales record this year, achieving its delivery target of 1.8 million vehicles, but this still falls short of CEO Musk's expectation of 2 million vehicles.
According to Reuters, LSEG, a London Stock Exchange group, has predicted that Tesla will deliver approximately 473000 vehicles in the fourth quarter and 1.82 million vehicles for the entire year of 2023, a 37% increase from 2022, based on the views of 14 analysts.
Garrett Nelson, senior analyst at US investment bank CFRA Research, believes that the fourth quarter is typically Tesla's strongest delivery quarter of the year, and it is expected to continue this year.
At the same time, Interface News learned from the sales end that Tesla is currently making efforts to promote, and sales personnel are increasing follow-up efforts and stating that there are discounts before the year to collect cars. Tesla also rarely participates in e-commerce platform marketing activities.
Since the beginning of this year, facing a slowdown in sales growth, Tesla has made multiple price adjustments to its four models worldwide. Especially in the Chinese market, Tesla's market share is influenced by the rise of Chinese independent brands and new forces in the automotive industry, mainly BYD.
In the third quarter of this year, BYD's market share in pure electric vehicles caught up with Tesla. From the growth trend, it may be expected to surpass the latter and become the global sales champion in the pure electric field in the fourth quarter.
However, throughout the year, Tesla's pure electric sales will still be higher than BYD's. BYD's cumulative sales of pure electric vehicles from January to November were 1.3841 million units. Based on November sales and BYD's growth trend, it is estimated that BYD's pure electric sales in 2023 are expected to exceed 1.55 million units, which is less than Tesla's estimated sales of 1.82 million units.
Several analysts are conservative in their sales forecasts for Tesla next year. Yamato Capital Market analysts have reduced delivery volume from 2.14 million vehicles to 2.04 million vehicles next year, and expect Tesla's average revenue per vehicle to decrease by 4% starting from 2023.
This is exactly what investors are concerned about, as sales growth slows down while gross profit margins continue to decline. Since Tesla has significantly lowered prices globally this year to boost sales, its gross profit margin has been a concern.
The financial data for the third quarter has reflected that Tesla's revenue in the third quarter was the slowest growth rate in three years, with a net profit decrease of 44% compared to the same period last year, and a significant decline compared to the previous two quarters. The gross profit margin has continuously dropped to the lowest point in four years (17.9%), and the gross profit margin of the automotive business has also dropped to 16.3%.
The profit that Tesla gave up in exchange for sales has already exceeded market expectations, and by the second quarter, Tesla's gross profit margin had been surpassed by BYD. Tesla, originally a measure of profitability, ranked among the top in the automotive industry, but its current declining trend has narrowed the gap with other automotive brands.
Another point of view is that sales volume is not the only key. Tesla can rely on profits like Apple to win. This profit growth comes from its full auto drive system (FSD).
George Gianarikas, the managing director of Canadian investment bank Gaton Beixiang, believes that Tesla's exchange of price for volume this year has affected its gross profit margin, but because of this, Tesla can sell a large number of its full auto drive system (FSD) to make profits, just as Apple sells its service content. He believes that Tesla can ultimately bring its automotive gross profit margin back to a state higher than the market average through vertical integration of FSD and supply chain.
Although this viewpoint sounds very reasonable and has been conveyed to the public by Musk himself, the situation may not be as optimistic. Recently, the United States and some European countries have begun to strengthen the supervision of Tesla's auto drive system and other parts. Tesla also recalled nearly 2 million vehicles on American roads at the beginning of this month due to safety problems to install new safety measures.
In addition, Tesla's energy and related services businesses grew well in the third quarter, with a total gross profit of over $500 million per quarter, which is twice the revenue of the second quarter. Tesla also stated that it will continue to invest in growth projects such as AI.