Tesla shares stumble on price cut, disappointing Model 3 deliveries

Tesla shares plummet after sales fail to hit targets

Moving beyond the success of Q4, we are taking steps to partially absorb the reduction of the federal EV tax credit (which, as of January 1, dropped from $7,500 to $3,750).

Tesla also revealed that most Model 3 sales were limited to the mid- and higher-price versions of the sedan and that most sales were to new customers.

Tesla more than tripled deliveries of its electric cars in the last three months of the year but the news was not enough for Wall Street which sent the company's shares into a tailspin following news that sales of its first mass market vehicle were less than expected. The Model 3 Long Range starts at $52,200 and the Performance-which in October added the Performance Upgrade at no extra charge-lists at $63,200.

The company announced a $2 000 price cut on each of its vehicles to help make up for U.S. buyers now being eligible for only a $3 750 federal tax credit for the next six months, half what they were getting previously.

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Tesla shares tumbled more than 8 per cent at the opening bell, to $304.69.

"We will focus even further on cost improvements while continuing to increase our production rate" during the fourth quarter, the company said at the time. Wedbush analyst Daniel Ives, meanwhile, said the price cut was "a potential positive" for demand, "but not what the bulls wanted to hear on the impact to profitability and ultimately the bottom line".

CNBC reports that Elon Musk's Tesla has yet again run into another stumbling block, once again failing to meet its expected fourth quarter delivery estimates. Tesla stock (NASDAQ:TSLA) has fallen more than 7% on Thursday's trading, partly due to the company's 63,150 Model 3 deliveries falling slightly short of FactSet estimates of 64,900. "We continue to believe Model 3 demand remains strong, particularly as the company has not begun global shipments or introduced leasing options, and are buyers on any weakness", Kallo wrote. Tesla also produced a total of 25,161 Model S and X, which is consistent with its long-term run rate of around 100,000 units per year. The vehicle has been delivered only to North American customers and in its mid to higher priced configurations. Global deliveries in Europe and China will start in February 2019.

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