Live updates: Tesla to report 4th-quarter earnings
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Electric vehicle demand is bound to soften over the next year. Tesla will have to choose whether it will continue to slash the prices of its cars to remain competitive, or keep its prices stable in 2024, Wedbush analysts said.
Price cuts on some of Tesla’s models have paid off so far. Last year, Tesla’s stock more than doubled, partly because discounts boosted sales in China.
“Which pricing path Tesla takes will be foundational move for the future of Tesla over the coming years in our view. This will be key focus for the Street tomorrow night to gauge what Tesla anticipates for 2024 around consumer demand globally,” the firm said in a note.
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Morgan Stanley says an imbalance of EV supply and demand which could weigh on Tesla this year. Though the world’s supply of electric vehicles is on the rise, demand looks to be weakening, analysts said, pointing to indicators like Tesla’s price cuts in China, fewer vehicles qualifying for tax incentives, and rental giants, like Hertz, cutting their supply of Teslas.
“Looking ahead, are we approaching maximum market negativity on EVs? We believe the trough may happen towards the latter part of 2024,” the bank said in a note, citing influences stemming from the EU Parliamentary and US presidential elections.
This post was originally published on Business Insider
