Tesla Global News #9

Tesla has reached a significant milestone in its operations in the United Kingdom, announcing the delivery of its 200,000th vehicle in the region.

With a substantial presence in the European market, Tesla has consistently leveraged it, alongside the Chinese market, to drive robust sales and meet high demand.

Comprising England, Scotland, Wales, and Northern Ireland, the U.K. is deeply engaged in the adoption of electric vehicles across various manufacturers.

In the U.K., Tesla has achieved the delivery of 200,000 electric vehicles, confirming the milestone earlier today.

In 2023, Tesla emerged as the dominant electric vehicle (EV) manufacturer in the U.K., surpassing MG and BMW by a significant margin and commanding a 14.9 percent market share in the region.

According to EU-EVs, a platform tracking registration data across Europe, Tesla's Model Y led sales figures in the U.K. for 2023, with the Model 3 securing the fourth position.

Tesla's presence has notably contributed to record-high EV sales in the U.K., particularly in recent years. Consequently, the company has expanded its infrastructure to accommodate the growing number of EVs in the region.

The European market has played a pivotal role in Tesla's growth trajectory in recent years. Despite having a production facility in Germany, referred to as Gigafactory Berlin, Tesla also relies on vehicles manufactured in China. The Shanghai factory serves as an export hub for Europe and has been fulfilling this role for several years.

While Tesla manufactures the Model Y in Europe, configurations for the Model 3 originate from China.

Battery electric vehicles (BEVs) accounted for 16 percent of the European market share last year, as reported by EV Volumes.

Wedbush Securities analyst Dan Ives has shared his delivery estimates for Tesla (TSLA) in the first quarter of 2024, indicating a potential demand issue following what he described as a challenging quarter for Tesla China.

Ives anticipates Tesla to report deliveries ranging between 425,000 and 475,000 units for the first quarter. He attributed this forecast to what he termed as a "perfect storm" experienced by Tesla during this period.

Recent reports suggest that Tesla has reduced its production output at Giga Shanghai. Local sources indicate that Tesla is adjusting its production levels at Giga Shanghai to align with the demand in the competitive Chinese electric vehicle (EV) market. As part of this adjustment, the EV automaker has reduced its working days from 6.5 to 5 days a week.

According to data from the China Passenger Car Association (CPCA) released in February, Tesla's sales in China experienced a decline. In the previous month, Tesla China sold approximately 60,365 units, marking an 18.8% year-over-year decrease compared to February 2023.

Despite the challenges faced by Tesla China in this quarter, analyst Dan Ives remains optimistic about TSLA's prospects. However, he exercises caution and has adjusted his price target for TSLA to $300.

Similarly, Morgan Stanley analyst Adam Jonas shares sentiments akin to Dan Ives. The investment bank has revised its delivery estimates for Tesla in the first quarter of 2024 from 469.4k to 425.5k units. Jonas has reiterated his Overweight rating for TSLA and retained his price target of $320.

Adam Jonas anticipates that Tesla may raise prices and implement cost-cutting measures to offset its performance in the first quarter. Despite the forecast for Tesla's deliveries in Q1 2024, Jonas sees growth potential for the company, particularly with its recent collaboration with CATL in expanding Giga Nevada.

Despite the prevalent negativity surrounding Tesla stock (NASDAQ:TSLA), Altimeter Capital CEO Bradley Gerstner appears to perceive an opportunity in it. Gerstner's optimism is partly attributed to Full Self-Driving (FSD) V12, which he described as giving him a "ChatGPT moment" during his experience with it.

Gerstner recently acquired Tesla stock, influenced in part by the company's leadership, notably Elon Musk, who has propelled the electric vehicle maker to a leading position in the market. According to a Seeking Alpha report, Gerstner hinted at Tesla possessing the "best product engineer CEO on the planet" at present, emphasizing the significant impact this has.

"When sentiments turn negative towards companies like that, that's when we become particularly intrigued, especially when they are helmed by a founder of Elon Musk's caliber, who excels as an exceptional product leader," stated Gerstner. He further highlighted Tesla's approach to autonomous driving, which he believes authentically simulates human driver behavior in vehicles.

"When I took a test drive in it, it was like a ChatGPT moment. (Tesla) completely abandoned their previous deterministic models and shifted to an imitation learning model that, for the first time, unlike Waymo — which still uses a deterministic model — feels like a human driving the car," the Altimeter Capital CEO remarked.

The American investor and hedge fund manager also expressed optimism about Tesla's $199 monthly Full Self-Driving (FSD) subscription service. Gerstner observed that this mirrors Apple's approach when the tech giant launched its Apple Music streaming service. Such a strategy would likely be challenging for competitors of the electric vehicle maker to replicate.

"That's the kind of thing that others can't easily replicate. (Elon Musk) has 5 million robot cars on the road collecting data that is training this imitation model; that makes it demonstrably better and nearly impossible for all the traditional OEMs to copy," he explained.

However, the Altimeter Capital CEO acknowledged that Tesla's challenges in countries like China could present complications, making holding TSLA shares still not suitable for the risk-averse. "This is not a venture for the faint-hearted. You have to size it appropriately. You have to be ready to purchase more if the stock price drops," Gerstner cautioned.

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