+ Record deliveries in 4Q23, Model Y best-selling car in FY23. TSLA delivered 485k vehices in 4Q23, a new record for a single quarter, with the company also hitting its FY23 target of 1.8mn deliveries. Additionally, Model Y was the best-selling vehicle globally with >1.2mn (65% YoY) units sold – beating Toyota’s RAV4 and Corolla models.
– Intensifying competition and lower prices hurting margins. We had assumed the intense price war in China over the last 1.5 years would ease as EV players shift from buying market share to improving profitability. However, we now expect competition to continue intensifying – with BYD spending another ~US$13bn in CAPEX for FY24e, and other Chinese EV companies like Li Auto and Xpeng growing CAPEX 30+% YoY. EV volume growth YoY for BYD is almost 2x that of TSLA. Increasing competition should place further pressure on prices and margins in the near term. ASPs for TSLA vehicles were down -17% YoY in FY23.
– Slowdown in near-term growth due to focus on developing new products. TSLA expects FY24e unit volume growth to be significantly lower vs FY23 (+38% YoY), with its focus shifting away from ramping production of current EVs as lead times have dwindled, to developing newer products like its next-gen low-cost EV. Given ongoing price wars and still high interest rates, we expect ASPs to decline roughly 4% YoY, and have also reduced our FY24e revenue estimates by 7%. We expect TSLA to lose the top spot to BYD in EV deliveries for FY24e.
ASP (Average Selling Price): total auto revenue for a given period divided by the number of vehicles sold.