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Tesla Stock: TSLA Trends Towards Record Quarter In China After Latest Registration Data

Tesla (TSLA) vehicle insurance registrations in China continued to increase sequentially last week, putting the global EV giant on the path to topping its prior best-ever China quarterly deliveries as the company looks to hit record-setting 2023 targets. TSLA stock edged up Tuesday.




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Tesla insurance registrations in China totaled 18,500, up 1% from 18,300 in the prior week, according to data reported by CnEVPost. The numbers represent the eighth full week since Tesla’s revamped Model 3 hit the market in China. Currently the numbers are not broken down to show Model 3 vs. Model Y registrations.

Tesla aims to deliver 1.8 million vehicles in 2023, with China a bright spot in Q4. So far in Q4 Tesla China insurance registrations, a rough gauge for vehicle deliveries, are up more 17% compared with the same point in Q3. The number of China registrations through Q4 is also 10% higher than the same point in Q2 when Tesla delivered a record 156,676 vehicles in China. Tesla is currently 6,000 registrations short of its Q2 number.

Tesla weekly registrations in China have surged now have been above 18,000 for back-to-back weeks. This surge comes as Tesla China recently announced that it has sold out of the Model Y for 2023, apparently referring to the standard range trim of the vehicle. The Model Y is the most popular vehicle in the Tesla lineup.

Tesla stock advanced 0.7% Tuesday during premarket action. On Friday, shares dropped nearly 0.8% to 252.54. In December, TSLA has angled 5% higher, finding support at its 10-day moving average.

Tesla Stock: China EV Registrations

TSLA has also upped its EV price war in China. The U.S.-based EV company has raised prices on Model Y trims in China while also beginning to offer a $1,127 insurance subsidy for base-trim Model 3 and Model Y vehicles in inventory through year-end, local media has reported. Tesla also is offering low-rate loans to spur demand.

In response, top competitor BYD (BYDDF) stepped up discounts on a range of models, as the China EV and battery giant aims to hit a sales target of 3 million EVs in 2023. Many other Chinese EV makers have announced significant discounts or price cuts.

On Saturday, China EV maker Nio (NIO) unveiled a new flagship ET9 at Nio Day 2023, but deliveries of the super-premium sedan won’t start until early 2025.

Meanwhile, the Warren Buffett-backed BYD is aiming to sell 3 million EVs, including plug-in hybrids, in 2023. BYD needs 316,626 EVs sold in December to hit that mark, ramping up discounts in the past several weeks to do so. BYD will likely top 500,000 sales of fully battery electric vehicles (BEVs) in Q4, which should be enough to seize the BEV crown from Tesla.

Tesla Targets Record Q4

Tesla sold 82,432 China-made vehicles in November, up 14.3% from 72,115 in October, breaking two straight months of sequential declines in sales, according to data from the China Passenger Car Association (CPCA). However, Tesla’s November sales total fell 17.8% from 100,291 in November 2022. This data includes exports.

Before Tesla delivered 12 Cybertrucks on Nov. 30, the EV company unveiled its new Model 3 in China on Sept. 1 with official sales beginning on Oct. 19. Tesla started delivering the “Highland” Model 3 on Oct. 26 in China, with European deliveries also underway. The global EV giant also launched a slightly updated Model Y in China earlier in October.

Through the end of Q3, Tesla delivered about 1.324 million vehicles globally for the year, meaning the company needs to deliver just under 476,000 in Q4 to reach 1.8 million. That’s 2% more than its record 466,140 deliveries in the second quarter and a rebound from Q3’s 435,059. Tesla reiterated its 1.8 million vehicle delivery goal in its third-quarter earnings.

However, since Oct. 18, analyst projections have come down slightly. Wall Street consensus has Tesla vehicle deliveries in 2023 totaling 1.797 million, just below that 1.8 million target, according to FactSet.

Wall Street is currently expecting 473,000 deliveries in Q4. On Tuesday, Piper Sandler analyst Alexander Potter told investors the firm predicts Tesla delivering 507,000 in Q4 and 1.83 million in 2023.

Meanwhile, RBC Capital last week reduced its Tesla Q4 delivery estimate to 456,000 down from 476,000, The firm cited registration tracking and “app downloads” as the two main methodologies it used to revise estimates.

“Even if our estimates proves optimistic, we still think Q4 will set a record,” Potter wrote Tuesday.

Tesla is expected to report fourth-quarter deliveries in early January.

Tesla Stock Performance

TSLA shares sank after the EV giant reported worse-than-expected Q3 earnings and revenue on Oct. 18. However, Tesla stock is building the right side of a double-bottom base giving it a 278.98 buy point, according to MarketSmith analysis.

Technically, Tesla stock now has a wafer-thin handle on a weekly chart, giving it a 259.84 buy point. But ideally the handle would have some depth, perhaps undercutting the Dec. 20 low and at least testing the 21-day moving average.

So far in 2023, Tesla has gained around 100%, easily outperforming the broader S&P 500 index.

Tesla stock ranks fourth in the 35 member IBD Automaker industry group. The S&P 500 component has an 80 Composite Rating out of a best-possible 99. Tesla also has an 87  Relative Strength Rating and an 88 EPS Rating.

Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.

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