Tesla shares go into reverse on missed deliveries and price cuts

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The electric-car maker's shares fell by 9.3 percent, to 301.87, in early trading.

It'll be a few more weeks before Tesla confirms whether it was profitable for a second consecutive quarter.

With Musk having generally reigned in his own behavior and the company's Model 3 production figures much closer to weekly production targets, the alarm bells that were ringing six months ago have quieted considerably.

Ives added that Tesla shares are "hypersensitive to any issue around Model 3" and that it will remain a stock that is "guilty until proven innocent" until it discloses quarterly earnings figures next year. In July, Tesla passed that mark and triggered a phase-out of the tax credit, when, according to CNN, it became the first carmaker in the United States to sell more than 200,000 plug-in vehicles. Instead, that credit has been cut in half to $3,750.


The company's sales included nearly 146,000 Model 3 lower-priced cars and another 99,000 examples of the more expensive Model S and Model X. The Model 3 starts at US$35,000 but still can't be purchased for under US$45,000. The vehicle has been delivered only to North American customers and in its mid to higher priced configurations.

The price cut comes as automakers expect US new vehicle sales to weaken in 2019, and with increased competition from new electric vehicle entrants.

Tesla delivered 99,394 of its Model S and X vehicles in 2018, just shy of its 100,000 goal.

Shares in Tesla Inc dropped as much as 9 percent on Wednesday on worries of future profitability, after the electric auto maker cut US prices for all its vehicles to offset lower green tax credits, while falling short on quarterly deliveries of its mass-market Model 3 sedan.


Tesla disappointed investors Wednesday, delivering 90,700 vehicles during the fourth quarter, which fell short of Wall Street forecasts despite its efforts to ramp up production. The company produced 61,394 Model 3s, up from a total of 53,239 Model 3s in the third quarter, but showed no improvement on the 5,000 per week rate it finally achieved at the end of the third quarter. Craig Irwin, an analyst with Roth Capital Partners, noted that Tesla's price adjustments on its vehicles are not helping TSLA stock either.

Longer-term we think the price cut is more concerning. Expansion of Model 3 sales to other markets, including with a right-hand drive variant, will occur later in 2019.

Mr Hyett estimated that if Tesla continues to deliver cars at the same rate, the price cut will mean $700 million in lost revenue in 2019.

"There remain significant opportunities to continue to grow Model 3 sales by expanding to worldwide markets, introducing lower-priced variants and offering leasing", Tesla said. Tesla has been through hell in 2018, thanks in no small part to the antics of its CEO.


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