What’s in store for Tesla’s Q3 report?

Share price of electric car manufacturer has been under pressure since early October, when it reported third-quarter global sales and production.

Tesla missed market expectations, but still delivered a record 343,830 vehicles, up 42 percent from last year. The Automotive News Research Center estimates sales rose 47 percent for the quarter to a U.S. record of 114,000 vehicles.

Those are big growth numbers amid supply constraints, but Musk has set a goal of 50 percent annual sales growth for the foreseeable future. Tesla’s stock market valuation is based in part on growing to millions of units annually from last year’s sales of 936,172 vehicles.

For the first nine months of 2022, Tesla’s sales growth was about 45 percent. If this continues, the electric car maker may miss its unofficial target of 1.4 million sales. In its favor – new factories this year Texas and Germany and expansion in China.

One possible sign of softening demand, according to some analysts, is a 22,000-unit gap between production and deliveries in the third quarter. Typically, Tesla is able to deliver the vast majority of its production through aggressive end-of-quarter pushes.

In a statement, Tesla said that all of the 365,923 cars in the third quarter had been ordered by customers, but the company faced problems securing enough vehicles to deliver them.

In the US, Tesla is also facing its own the first signs of real competition in the electric car market.

“Its market share in the US electric vehicle market could be at risk as legacy carmakers ramp up production of battery-only vehicles and demand for [EV] The engine technology may slow down once early adopters are satisfied,” Bloomberg Intelligence said.

Adding to the uncertainty are rising inflation and interest rates, which could eat into profits and slow sales. Tesla, with four models, has also fallen behind on its product roadmap, especially for the Cybertruck pickup truck that will arrive next year.

Despite missing market expectations for third-quarter global sales, a rise in Tesla’s average deal price could provide the financial performance Wall Street is waiting for, according to some analysts.

Reuters said the Texas-based company is expected to report a 60 percent increase in revenue to just under $22 billion from $13.8 billion a year ago, according to an average estimate of 25 analysts based on data from Refinitiv.

Zacks Equity Research estimates Tesla’s total gross revenue from the auto industry for the third quarter at $5.9 billion, up from $3.7 billion a year earlier.

“In addition to lower-than-expected total shipments in the third quarter of 2022, high raw material costs and logistics constraints are expected to weigh on margins,” Zacks said this week. “However, Tesla likely benefited from the increase in average selling price.”

Tesla, which had about two-thirds of the U.S. electric car market through September, had an average transaction price of $69,831 in August, up 31 percent since the start of 2021, according to Kelley Blue Book.