Tesla sinks after cutting Model 3 price as deliveries disappoint
(delayed at least 15 minutes)
Tesla Inc. (TSLA.O 6.57%) plunged in early trading after delivering fewer Model 3 sedans than analysts expected in the fourth quarter and cutting prices to partially make up for the federal tax credit that’s been halved in the U.S.
The 63,150 Model 3s Tesla delivered in the last three months of 2018 trailed the roughly 63,700 average analyst estimate, but topped the 56,065 the company handed over to customers in the third quarter.Key Insights
Tesla announced a US$2,000 price cut on each of its vehicles — the Model 3, Model S and Model X — to help make up for U.S. buyers being able to get only a US$3,750 federal tax credit for the next six months. It will be a few more weeks before Tesla confirms whether it was profitable for a second consecutive quarter, but the company’s ability to sustain a high level of production — it built 61,394 Model 3s and 86,555 vehicles total in the last three months — will go a long way toward that goal. Chief Executive Officer Elon Musk now plans to turn attention to filling Model 3 orders in Europe and China starting in February, which could help offset the loss of some U.S. demand now that customers can no longer get the full US$7,500 federal tax credit. Tesla fell just short of its target to deliver 100,000 of its Model S and Model X vehicles for the year, selling 99,394 units.
Tesla shares fell as much as 8 percent to $306 as of 8:45 a.m. Wednesday in New York, before the start of regular trading. The stock advanced 6.9 per cent last year while most other automakers slumped.