Tesla's 2022 target sales growth of 50%? Wall Street boss shook his head: a bit "delusional"

The article comes from the Financial Associated Press, written by Huang Junzhi

Shares of tesla, an electric car company, closed higher on Friday after an unusually turbulent week. Earlier, the company released its fourth-quarter results report, and although it was better than expected, there were still some Wall Street analysts who "did not buy it" and said there was reason to be skeptical of its ambitious 2022 target.

Tesla daily chart, from Investing.com

In the final period of 2021, the automaker achieved double-digit growth in revenue and gross margin, exceeding expectations. Tesla CEO Elon Musk said that despite supply chain issues, Tesla's sales will easily grow by more than 50% by 2022 compared to 2021, thanks to the launch of new factories and the increase in production of existing factories.

Still, some market watchers are disappointed that the company has failed to spell out plans for low-priced models. In the absence of specific forward-looking plans, some analysts have put themselves in a cautious camp and believe that the headwinds that are forming will slow Tesla's growth momentum.

How to achieve the goal is not clear

Colin Langan, an automotive analyst at Wells Fargo, said, "I'm a bit 'unbelievable' about their 50 percent growth forecast. I think the second half of the year will be tough. Honestly, if the supply doesn't increase to meet their 50% goal, there may not even be a chance to give it a try. ”

"I really doubt that they can really sell. So in my model, I didn't get them to the goal," the analyst added.

Analysts at Bank of America also expect more details to be needed on the company's timeline for ramping up production at its plants in Austin and Berlin. In a research note this week, the bank noted that "it is disappointing that there is little clear guidance beyond the current state of these two plants." ”

Meanwhile, Morgan Stanley noted that progress at the Berlin plant was worrying. "While the details remain unclear, we believe investors should be prepared that the situation at Tesla's German factory may be more complicated than people realize today," the bank said. ”

"The story of the Gigafactory in Berlin is not just a story of Tesla's growth, it is a story of the German workforce and (growth). Tremendous progress has brought a certain level of complexity. The bank added.

Competitive pressure from traditional car companies

In addition, Damo also warned that due to supply chain problems, Tesla's factory "has been undercapacitated for several consecutive quarters." Tesla also said at the performance meeting that it would not launch a new model, and the Cyberruck pure electric pickup truck, Semi pure electric truck and Roadster's new generation of pure electric supercar, these new products have missed their planned production dates.

On the other hand, Langan said, "According to my estimates, once Austin and Berlin go into production, their production capacity will reach about 2 million units." Tesla will primarily drive the adoption of the Model S and Model Y models, making them among the best-selling models in the market.""

That would mean competing with big foreign competitors like Toyota Motor. According to Langan, Toyota sold about 2.2 million Camry and RAV4 models in 2019, but there is a big difference in the price of the two companies' products.

Langan said, "The base price of the RAV4 is about $28,000, while the base price of the Tesla Model Y is between $58,000 and $59,000." ”

"That means twice the price, but to achieve the same sales volume, which is a very high obstacle." Once the capacity goes live, it will be truly tested in the second half of this year. He added.

Colin Rusch, a senior research analyst at Oppenheimer, rated the stock better than the broader market, but he also said the focus on driving future profits would be "cost-related" compared to his peers.