Tesla (TSLA) announced
2024
first-quarter
deliveries
of
386,810
vehicles,
down
roughly
8.5%
versus
the
first
quarter
of
2023.
We
have
updated
our
model
to
assume
that
full-year
2024
deliveries
come
in
roughly
flat
versus
2023
at
a
little
over
1.8
million
vehicles,
down
from
our
prior
forecast
for
10%
growth.
With
our
long-term
outlook
largely
unchanged,
we’ve
reduced
our
fair
value
estimate
for
Tesla
to
$195
per
share
from
$200.
Our
narrow
moat
rating
is
unchanged.
•
Fair
Value
Estimate:
$194
(current
price
$164)
•
Morningstar
Rating:
★★★
•
Morningstar
Economic
Moat
Rating:
Narrow
Tesla
shares
fell
5%
on
April
2
as
the
market
reacted
negatively
to
the
decline
in
deliveries.
At
current
prices,
we
view
Tesla
shares
as
slightly
undervalued,
trading
around
15%
below
our
updated
fair
value
estimate,
but
still
in
3-star
territory.
Accordingly,
we
recommend
investors
wait
for
shares
to
offer
a
larger
margin
of
safety
before
considering
an
entry
point.
Tesla
Factory
Shutdowns
Management
attributed
the
decline
to
the
production
ramp-up
of
the
updated
Model
3
at
the
company’s
California
factory,
as
well
as
factory
shutdowns
from
shipping
diversions
caused
by
the
Red
Sea
conflict
and
an
arson
attack
at
Gigafactory
Berlin.
While
those
events
caused
vehicle
production
to
fall
around
2%
versus
the
first
quarter
of
2023,
in
our
view,
the
larger
deliveries
decline
points
to
a
slowdown
in
demand
for
Tesla’s
vehicles,
as
competitors
may
have
cut
prices
more
than
the
firm
to
win
consumers,
particularly
in
China.
While
we
were
surprised
by
the
decline,
we
assumed
Tesla
would
see
slower
growth
in
2024
and
2025
as
the
market
for
its
luxury
vehicles
approaches
saturation.
In
the
longer
term,
we
still
forecast
around
5
million
deliveries
by
2030,
largely
driven
by
the
affordable
vehicle
Tesla
aims
to
launch
by
the
end
of
next
year.
The
company’s
entry
into
this
segment
should
drive
delivery
volume
growth,
while
management’s
plan
to
reduce
unit
production
costs
should
help
boost
profit
margins.
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