Tesla Stock Flashes Buy Signal As Strong Q4 Deliveries Seen

Tesla deliveries are expected to jump year-over-year when Elon Musk's carmaker reports fourth-quarter figures in early January. Tesla stock rose Monday, rising to a trendline buy point.

The maker of upscale electric cars could report Q4 deliveries as early as Jan. 1 and as late as Jan. 5, with Monday Jan. 3 a likely date.

FactSet consensus figures are for 261,400 Model 3 and Y vehicles and 15,500 Model S and X vehicles. That totals 276,900 vehicles. In Q3, Telsa delivered 241,300 vehicles in the quarter, beating estimates for 232,000.

But some analysts are more even bullish on Q4 deliveries.

RBC Capital Markets analysts see Q4 deliveries soaring 58% year-over-year and 18% quarter-over-quarter to 285,000 units. That would equate to 913,000 deliveries for the year. The RBC analysts see Model 3 and Y deliveries rising 69% year-over-year to 273,000 units.

They see Model S and X vehicle sales falling 34% vs. a year earlier to 12,500 units. But that's up 35% quarter-over-quarter as the Model S Plaid, the revamped version of the luxury sedan, ramp up. Model S and X deliveries were scant in the first half of the year, amid weak production following modest model revamps at the start of the year.

As of September, two out of every three electric vehicles in the U.S. are a Tesla as sales boom. Ford, General Motors and other automakers this year have faced a semiconductor shortage, which is just starting to ebb. Tesla was largely able to avoid the shortage and production pauses.

Overall, RBC sees Tesla producing 285,000 to 295,000 vehicles during the quarter.

Tesla Sales Boost With EV Credits Stalled

Deliveries could surge even higher than expected for Tesla in Q4 with new electric vehicle credits on hold. New EV credits, which would make Tesla and GM eligible again, are part of the Build Back Better plan. That has stalled in the Senate. While the Democrats' spending bill could still go forward in 2022, including EV credits, the current limbo could spur Americans to take Tesla deliveries before year-end instead of waiting for 2022.

RBC Capital Markets sees the majority of Tesla vehicles in Q4 delivered to U.S. customers, with China as a close second.

Tesla had expected new plants near Austin, Texas, and Berlin to begin producing Model Y crossovers by year's end, but as of Dec. 27 that hasn't happened. However, as those plants open and ramp up output, Tesla capacity will increase substantially. Rival EV production should surge as well, with the U.S. enjoying a truly competitive EV market for the first time. Rebounding auto production should eventually ease Tesla's extreme pricing power.

Tesla Stock

Shares popped 4.5% to 1,115.29 on the stock market today, continuing to race higher from the Dec. 21 low of 886.12. TSLA stock is consolidating with a 1,202.05 double-bottom buy point. But Tesla stock is clearing a trendline that would serve as an early entry.

Its relative strength line jumped higher after moving sideways and down for several weeks. Tesla's RS Rating is 97 out of a best-possible 99, while its EPS Rating is 72. With a perfect Composite Rating of 99, Tesla ranks No. 1 in IBD's auto manufacturers group. Tesla is a Leaderboard stock.

As of a Dec. 21 note, RBC has a sector perform rating on TSLA stock.

Ford stock rose 2.6%, near long-term highs. GM stock climbed 1%.