Tesla Stock Skyrockets 12% After Impressive 2021 Delivery Numbers, Despite Recalls

Mandatory Credit: Photo by Matt Rourke/AP/Shutterstock (12577118a)FILE - Tesla CEO Elon Musk departs from the justice center in Wilmington, Del.
Matt Rourke/AP/Shutterstock / Matt Rourke/AP/Shutterstock

Following last week’s announcement that Tesla recalled nearly half a million vehicles, the stock briefly dropped. However, yesterday’s blockbuster fourth-quarter delivery figures made the stock jump for the first trading day of the year, in what several analysts see as a positive sign for the company.

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The stock is up 12% on Jan. 3 following a Jan. 2 announcement that fourth-quarter deliveries amounted to 308,600 electric cars and full-year deliveries amounted to 936,172 vehicles. “Thank you to all of our customers, employees, suppliers, shareholders and supporters who helped us achieve a great year,” the company said in a release.

The figures beat analysts’ expectations as many had anticipated Tesla deliveries of about 267,000 in the fourth quarter and 897,000 for all of 2021, according to CNBC.

“This was a ‘trophy case’ quarter for Musk & Co. with massive momentum moving into 2022,” Wedbush Securities analyst Daniel Ives wrote in a note sent to GOBankingRates. “Total production in the quarter was 306k and was roughly 20k ahead of our estimates. Taking a step back, with the chip shortage a major overhang on the auto space and logistical issues globally these delivery numbers were ‘jaw dropping’ and speaks to an EV demand trajectory that looks robust for Tesla heading into 2022.”

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Wedbush said it maintained its “Outperform” opinion on the stock.

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Analysts Suggest Tesla Will Have a Great 2022

CFRA Research also raised its opinion on Tesla to “Buy” from “Hold,” as deliveries were “well ahead of the 265,700 consensus,” according to a note sent to GOBankingRates.

“After a year in which TSLA shares rose 50%, underperforming competitors such as Lucid (+280%) and Ford (+136%) but outperforming GM (+41%), we raise our opinion to Buy as the completion of new factories in Texas and Germany sets the stage for further growth in 2022 and beyond,” Garrett Nelson, CFRA senior equity analyst, wrote in the note. “We also believe Model S Plaid sales will help provide an uplift to average price realizations and that first deliveries of the Cybertruck and Semi could come sooner than most expect. A near-term overhang in the form of tax-related stock sales by Elon Musk has been lifted and a 13% pullback over the last two months provides a compelling entry point, in our view.”

Last week, according to filings from the National Highway Traffic Safety Administration (NHTSA), 356,309 Tesla Model 3s were recalled due to a defect in the trunk harness. “Over time, repeated opening and closing of the trunk lid may cause excessive wear to the coaxial cable. If the wear causes the core of the coaxial cable to separate, the rearview camera feed is not visible on the center display,” according to the filing. “Unavailability of the rearview camera display may affect the driver’s rear view and increase the risk of a collision.”

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A second recall affects 119,909 Model S vehicles and is due to the secondary frunk latch, which “may be aligned too far rearward,” according to another NHTSA filing.

In addition, Reuters reports that China is set to recall 200,000 Tesla vehicles.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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