Tesla may be experiencing diminished demand, as reported by Morgan Stanley analyst Adam Jonas following Q3 deliveries that did not meet Wall Street’s expectations (via Seeking Alpha), despite setting company record highs.
As a result, Jonas reduced his full-year forecast from 1.37 million to just 1.31 million, after being reduced from earlier estimations of 2 million and 1.8 million deliveries.
“We believe that factors that drove Tesla’s (TSLA) weaker than expected 3Q production and deliveries could continue to present headwinds into 4Q as well as into 2023,” wrote Jonas in a note to clients explained.
Jonas added that Tesla is probably going through its “peak margins” currently, forecasting that the automaker will continue to ramp up production through the end of the year.
Additionally, Jonas dropped his Q3 2023 gross margin predictions to 25 percent from his previous 26.2 percent estimate.
“Is Tesla experiencing demand destruction?,” asked Jonas “Very likely, at the margin, although this would be reflected in shorter lead times and price declines in coming months as even EV customers may be feeling the effect of inflation fatigue/buyers strike.”
Jonas also changed his Tesla price target to $350 from a previous target of $383, with a bear case target moved the just $150 from $167.
In February, Jonas also wrote that Tesla’s revenues could exceed Ford and General Motors combined by 2027.
