Tesla’s Q3 Flop, Netflix’s Price Hike, and Rivian’s Plunge: Weekly Tech Roundup
Here is your weekly recap of the biggest headlines from a significant earnings week for the tech industry. We’ll cover Tesla’s disappointing delivery numbers and price cuts, Netflix’s plans for a price increase, Apple’s new App Store rules in China, and Rivian’s debt offering.
Tesla’s Delivery Miss and Newest Price Cuts
Tesla fell short of expectations in Q3, reporting 435,059 vehicle deliveries compared to Wall Street’s estimate of 456,722. The electric vehicle (EV) giant also produced fewer vehicles than anticipated, manufacturing 430,488 units instead of the estimated 461,992. Tesla attributed the lower numbers to upgrades made to its facilities and stated that it remains on track to reach its 2023 volume target of 1.8 million vehicles.
Wedbush Securities, which has an Outperform rating on Tesla shares, attributed the miss to longer-than-expected downtimes in Shanghai and Austin factories. They estimate that around 20,000 units were shifted to Q4. Wedbush remains optimistic about Tesla’s future, citing the Model 3 refresh in China and the upcoming Cybertruck production as positive factors for the company.
In addition to the delivery miss, Tesla announced price reductions on several popular EV models in the US. The Model 3 sedan’s price was lowered to $38,990 from $40,240, while the long-range Model 3 now costs $45,990, down from $47,240. The performance model and Model Y performance sport utility vehicle also saw price reductions. Despite the negative news, Tesla’s shares rose 6.4% for the week.
Netflix Eyes Price Hike After Actors’ Strike
According to The Wall Street Journal, Netflix plans to increase the price of its ad-free service in several markets globally after the Hollywood actors’ strike concludes. The exact amount and timing of the price hike remain unclear, but it is expected to begin in the US and Canada. This move aligns with other streaming companies’ efforts to improve profitability without alienating customers. The WSJ notes that major ad-free streaming services have already increased prices by approximately 25% over the past year. Despite the news, Netflix’s shares rose 1.2% for the week.
Rivian Sinks on Debt Offering and Preliminary Numbers
Rivian Automotive saw its shares plummet by 23% after announcing a $1.5 billion green convertible senior unsecured note offering and disappointing preliminary Q3 results. The debt offering is expected to extend Rivian’s cash runway through 2025, with an option for an additional $225 million. However, the company’s Q3 sales are projected to be slightly below market expectations, ranging between $1.29 billion and $1.33 billion. Despite the decline, Truist remains bullish on Rivian, citing the capital raises as part of the company’s strategic plan. Rivian’s shares lost 20.7% for the week.
Apple Changing App Store Rules in China
Apple now requires new apps to provide proof of a Chinese government license before being published on its platform. This policy brings Apple in line with local competitors who have implemented similar rules to comply with China’s increasingly strict regulatory environment. Obtaining the necessary “internet content provider (ICP) filing” license typically requires a presence in China or collaboration with a local publisher, presenting challenges for foreign app developers. Apple had previously maintained a more lenient approach to ICP filings, which contributed to its popularity in China. Apple’s shares rose 3.7% for the week.
That wraps up this week’s tech roundup. Stay tuned for more updates on these and other tech industry news!
