Tesla's capital expenditure guidance exceeds expectations amid a sluggish electric vehicle market

According to Zhitong App, Tesla disclosed in its 10-K filing on Monday that it expects its capital expenditures in 2024 to exceed $10 billion, while the market generally expects $9.8 billion. It is projected that capital expenditures in 2025 and 2026 will be between $8 billion and $10 billion. In comparison, capital expenditures in 2023 were $8.9 billion and $7.16 billion in 2022. As of December 31, 2023, Tesla had a total of 140,473 employees worldwide. It is reported that the number of full-time employees globally at the end of 2022 was 127,855.

Tesla stated, "Given the number and breadth of our core projects, our capital expenditures are typically difficult to forecast in the short term and may be further impacted by uncertainties in the future global market environment. We are simultaneously launching new products, constructing or expanding production facilities on three continents, piloting the development and manufacture of new battery technologies, expanding our Supercharger network, investing in training and products supported by artificial intelligence, and our capital expenditure pace may vary based on overall project priorities, achievement of milestones, production adjustments for various products, improved capital efficiency, and the addition of new projects."

Tesla's announcement of slightly higher-than-expected capital expenditures has brought some hope to investors, as the increase in capital expenditures indicates that the company still intends to expand production despite the bleak outlook in the electric vehicle market. At a time when the global electric vehicle market is slowing down, warnings of a slowdown in the global electric vehicle market have been heard one after another. Previously, due to continued global demand slowdown and intense competition in the industry, Tesla announced disappointing performance, causing concerns among investors about its growth and profitability. After the earnings report was released, investors angrily sold off 198 million shares, causing the market value to evaporate by $80 billion in a day, and Tesla's stock price subsequently plummeted by 12.1%, catching the market off guard.

Meanwhile, Ford (F.US) announced that it is cutting production of its "most popular model" electric pickup truck, the F-150 Lightning, due to weak sales. Ford expects global electric vehicle sales to continue to grow in 2024, but at a slower pace than expected. Hyundai also stated that the popularity of the electric vehicle market is declining.

In addition, LG Energy Solutions (LGES), a global leader in batteries, predicted a slowdown in the global electric vehicle market after announcing lower-than-expected profits last week. STMicroelectronics (STM.US) also announced that its revenue for the fourth quarter of 2023 and sales guidance for the first quarter of 2024 were both below expectations. STMicroelectronics is one of the largest electronic component suppliers in the automotive industry, accounting for about half of its business. Furthermore, Texas Instruments (TXN.US) also announced disappointing sales forecasts for the current quarter, indicating weak demand for industrial and automotive electronic components. The company's largest portion of revenue comes from industrial machinery and automotive manufacturers. In pre-market trading, as of the time of writing, Tesla's stock price has risen by 1.15% to $185.35, with the previous 52-week trading range being $152.37 to $299.29.