Tesla is going to report on their earnings today and we see some of the biggest concerns with Tesla being outlined. Here they are, along with the solutions to each.
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Tesla's Biggest Concerns
With Tesla just about to report on earnings today, there are some big concerns that have been shared about the company. Hopefully, Tesla is able to address these concerns with their solutions. Let's go over them.
Elon Musk is currently blaming the FED with high interest rates, which is slowing vehicle purchase demand. The reason he says this is that a higher interest rate on an auto loan means a higher overall price and monthly payment for a customer, causing fewer customers to buy.
Zach Kirkhorn, offering 2023 delivery and production guidance. More than likely, he or Elon Musk is going to say that they expect Tesla to grow at an average rate of 50% over a multi-year horizon. It would be nice to hear how they expect 2023 to go.
There are concerns with the launch date of the Cybertruck and the new Tesla Roadster and if they will happen this year. This is a problem because there aren't really any status updates being given on these - just that they haven't happened yet.
Also, there are concerns about a global recession, demand for EVs, and the ramping of the 4680 batteries. There are concerns that Tesla's margins are going to drop significantly.
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Tesla's Solutions to Concerns
Tesla can address these concerns pretty easily, and we'll start with the FED and high interest rates. Fortunately, Tesla has addressed this by lowering prices. Lower prices mean that more customers can afford Tesla vehicles. Tesla also offered a temporary incentive in Germany for a below 1% interest rate, which will spur purchases and create demand.
Next is Tesla's overall guidance that vehicle deliveries and production will grow at an average of 50% per year. There wasn't much guidance given last year on the earnings call for Q3, 2022 to reiterate that, and it would be good for them to say what they expect 2023 to be. That's how this problem gets solved - simple and clear communication on what Tesla expects.
Next is the Cybertruck and the new Tesla Roadster. Tesla needs to simply say that the Cybertruck is on track to begin production, let's say on August 1, 2023, and the new Roadster will begin production on March 1, 2024. Some statement that gives a clear indication of the release date for these is what is necessary.
I don't see Twitter as a problem anymore for Tesla, as Elon Musk has calmed down his commentary there. He seems more focused on Tesla and is dealing with other things in his life, like a trial for a Tweet he made about taking Tesla private.
Tesla can also address concerns about its demand and, 4680 battery production ramps by simply communicating how these are going. They can say they have a run-rate of 4680 batteries that is about 5,000 per month. That would help give a picture of what they can produce and what number of vehicles can support the batteries.
I'm hopeful to hear communication that addresses these from Tesla's earnings call today. Will Tesla address these issues directly, and will they communicate?
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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.
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