Tesla misses sales targets as pressure builds on Musk’s priorities

“No way to sugarcoat this,” Gary Black, managing director of the Future Fund ETF, an investment fund not associated with Australia’s sovereign wealth fund, said on Twitter. He predicted that analysts would reduce their estimates of Tesla sales and profits in 2023. Tesla will report 2022 earnings on January 25.

Last week, Musk tried to reassure Tesla employees, telling them not to fixate on the stock price and repeating assertions that the carmaker would become the most valuable company in the world, Reuters reported.

China, the world’s largest car market, is a big focus of investor concerns. The sharp rise of COVID-19 cases in China has weighed on demand and forced the company to periodically suspend production at its biggest factory, in Shanghai.

In addition, Chinese manufacturer BYD has raced past Tesla in electric vehicle sales in China, casting further doubt on Musk’s ability to achieve world domination in the auto industry.

The growth of Tesla sales exceeds any major rival in percentage terms. The company is also among the most profitable carmakers in the world and is ramping up new factories in Texas and Germany.

But the company faces more intense competition from traditional carmakers like Ford, General Motors and Volkswagen. Those companies have decades of experience mass-producing vehicles cheaply, and some investors believe that those carmakers could catch up with Tesla more quickly than expected.

Tesla also faces softening consumer demand, partly because of rising interest rates. Wait times for Tesla models have shrunk, and the company has cut car prices in China and offered incentives to buyers in the United States.

Car buyers, especially the left-leaning, environmentally aware consumers who tend to buy electric cars, also appear to be turning away from Tesla because of Musk. His erratic behavior at Twitter and heated rhetoric on the social media platform have endeared him to conservatives and Silicon Valley executives but outraged other people.

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Daniel Ives, an analyst at Wedbush Securities who has pleaded with Musk to focus his energy on Tesla, said the fourth-quarter deliveries were decent considering the difficult economic environment. “We believe this was a relatively good performance,” Ives said on Twitter.

Tesla sales could get a boost after its cars became eligible for federal incentives on January 1. A new law abolished a limit on the number of vehicles from any one manufacturer that were eligible for tax credits of up to $US7500 ($10,997). Tesla had used up its quota.

Tesla cars made at the company’s factories in Texas and California also meet the requirement that vehicles must be manufactured in the United States, Canada or Mexico to be eligible for credits.

This article originally appeared in The New York Times.

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