Gary Zhou 
Key Points
- 💼 Wells Fargo lowered Tesla’s price target from $260 to $250 due to reduced production outlook.
- 📉 Tesla’s gross vehicle margin in the third quarter decreased to 17.9%, raising concerns about decreasing prices and profits.
- 📈 Analysts expressed worries about Tesla’s forecasted 50% year-over-year growth and its plans for Gigafactory Mexico.
- 🎯 Other financial analysts, such as Wedbush and Morgan Stanley, also reduced their price targets for Tesla.
- 🏭 During the Q3 2023 earnings call, Tesla discussed plans for Gigafactory Mexico and expressed concerns about timing and affordability.
- 🔌 Tesla offers free unlimited Supercharging transfer for select end-of-year Model S, Model X, and Model Y deliveries in North America.
- 💰 Model Y vehicles qualify for a federal tax credit until December 31, 2023.
- 🚗 Model S and Model X have delivery estimates for October to November 2023.
- 📊 Tesla reaffirmed its guidance of 1.8 million deliveries in 2023, despite concerns about price cuts affecting gross vehicle margins.
Wells Fargo lowered its Tesla (TSLA) price target from $260 to $250 based on its lowered production outlook. Wells Fargo analyst Colin Langan also expressed concerns over Tesla’s decreasing prices and profits.
Tesla reported a gross vehicle margin of 17.9% in the third quarter, a decrease compared to 25.1% in 2022. Langan expressed concerns about Tesla decreasing prices to hit its 1.8 million guidance in 2023. Analysts are worried about Tesla’s forecasted 50% growth year-over-year after the company showed uncertainty in its plans for Gigafactory Mexico.
Dan Ives from Wedbush lowered Tesla’s price target from $350 to $310. Morgan Stanley’s Adam Jonas also reduced his price target for Tesla from $400 to $380.
“[Tesla] did not address investors’ concerns that price cuts are the main driver Tesla will use to hit its 1.8 million 2023 delivery target,” said the Wells Fargo analyst. “The volume outlook is unclear as management talked down Cybertruck and the ramp at the Mexico plant.
Langan was present during Tesla’s Q3 2023 earnings call. At the meeting, he asked Elon Musk and other Tesla executives about its plans for Gigafactory Mexico since the company stated it wouldn’t be “going full tilt” on the plant until the economy is strong.
“Can you continue at a 50% CAGR without [the Mexico] plant? And where would that come from? And any color on what you mean [by] not going full tilt? Could that plant get delayed indefinitely? Or what are you going to talk about?” Asked Colin Langan.
Elon Musk confirmed that Tesla would definitely make a Gigafactory in Mexico. However, he expressed concerns over the timing for the factory, given rising interest rates and its effects on affordability.
Another Tesla executive said the company could continue to grow in Giga Texas. There was talk about starting production on Tesla’s first next-generation in Texas.
