Tesla bulls ignite a furious rally after the EV maker delivers a ‘trophy case’ Q4 sales beat

January 3, 2022, 11:39 AM UTC

Tesla is expected to open sharply higher after the carmaker dodged COVID-related lockdowns and semiconductor shortages that dogged competitors to post yet another record sales quarter.

The wild ride for investors is set to continue after sales volumes smashed analyst expectations. In premarket trading, Tesla shares jumped nearly 7%, adding to the big swings experienced ever since October’s Hertz deal. An options-induced rally briefly evaporated late in the year following CEO Elon Musk’s drip-drip-drip rounds of insider selling.

The electric vehicle pioneer, currently worth just over $1 trillion, reported on Sunday it had sold 308,600 vehicles—its best-ever quarter—in the three months through December, signaling the company is poised for further gravity-defying growth in 2022. Über bull Daniel Ives of Wedbush Securities called the knockout numbers a “‘trophy case’ quarter.”

With 936,172 vehicles delivered annually to Tesla customers, the staggering 87% increase blew the doors off a year in which all other competitors scrambled to get their hands on every precious microchip they could find amid a global crunch.

Sales at Volkswagen’s core unit, for example, fell nearly 5% in the 11 months through November over an already very weak 2020 comparison. The failure to secure more chips nearly cost the job of Volkswagen Group CEO Herbert Diess, who aims to transform both the parent company, and the brand into Elon Musk’s biggest rival

Tesla also appears completely immune to the seasonal fluctuations in production that usually afflict the industry. Instead, manufacturing output continues to surge with each passing quarter, leading bulls to argue the company is constrained only by the number of cars it can build, rather than the whims of customer demand.

Its closely watched quarterly production rate hit a record 305,840 vehicles, indicating Tesla has effectively doubled capacity in just 15 months’ time. It suggests the carmaker is now capable of building roughly 1.2 million cars this year from its two plants in California and China alone, and potentially more should industry supply chain woes end.

After Tesla posted its Q4 production numbers, New Street Research analyst Pierre Ferragu warned consensus estimates of 50% growth for 2022 were far too conservative with volumes pegged at a mere 1.4 million vehicles despite two new manufacturing plants coming on line. 

“A monster beat is to be expected, again, in 2022,” he posted on Twitter.

To better meet demand in the booming EV market of Europe, and avoid hefty import duties, Tesla is currently finishing the completion of a new factory in Germany. Once it receives final governmental approval to begin building cars for sale, the new plant can free up capacity in China currently reserved for the European market rather than its own domestic customers.

Assembly lines will also rumble to life soon in Texas, where Tesla’s second U.S. vehicle production site will start off with the popular Model Y before later adding the hotly anticipated Cybertruck

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