Tesla set for strong Q1 delivery numbers catalyzed by Model 3 and Y price cuts: Wedbush

Tesla (NASDAQ: TSLA) is set for a strong Q1 in terms of vehicle delivery numbers, which have mostly been catalyzed by substantial price cuts on the Model 3 and Model Y, Wedbush’s Dan Ives said in a note.

Tesla will report its Q1 delivery figures this weekend, and Wedbush is anticipating a figure of around 420,000 units. With most of the delivery mix consisting of Model 3 and Model Y vehicles, Ives believes that, despite the “shaky macro” conditions, Tesla is still set to deliver a quarter that will set a tone for vehicle deliveries for the rest of the year.

Tesla pushed vehicles out the door and into consumers’ hands by cutting prices numerous times over the first quarter. Competitors were unable to match the substantial price cuts that Tesla offered, but they were able to adjust some models accordingly.

Ford, for example, slashed Mustang Mach-E prices in response to Tesla’s cuts on the Model Y, its biggest competitor.

However, Tesla could be primed to push more units for delivery in the coming quarter as the automaker will look to continue its presence as the leading electric automaker in the global market.

“That said, the macro remains uncertain and we would not be surprised to see more slight price cuts around the edges both in the U.S. and China over the coming months for Tesla to further stimulate consumer demand,” Ives wrote.

In the U.S., Tesla is truly the cream of the crop when it comes to EVs. Its charging network, vehicle software, and overall tech as an automaker are unmatched. However, the company faces stiffer competition in China, but Ives still believes Tesla is the leader.

“Domestic players such as BYD, Nio, and Xpeng remain very formidable competitors, but ultimately, we believe market share shifts are now favoring Tesla in China,” he writes.

In terms of the company’s overall delivery figures for the year, Wedbush still has its estimates hovering at the 1.8 million unit mark, but “it appears the trajectory so far is trending slightly above that level out of the gates in Q1 based on China and U.S. demand post price cuts.”

Ives and Wedbush still hold a $225 price target and an “Outperform” rating on the stock.

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