Compounding investor anxiety was the company's announcement that it would slash prices on all Tesla models by $2,000, with the price cut meant to offset a reduced federal tax credit that took effect on Tuesday. The company said on Wednesday it had produced 61,394 Model 3s and delivered almost 1,000 vehicles per day in the fourth quarter.
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. "I don't expect that Tesla operates in the black in 2019", Frank Schwope, an analyst with NORD/LB said. In Q4 2018, Tesla produced a total of 86,555 vehicles, which is 8% more than its prior all-time-high in 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.
Tesla shares tumbled more than 8 per cent at the opening bell, to $304.69. "We also believe the $2 000 price cut to help subsidise the lower EV tax credit is a move that was not fully expected". Tesla delivered 13,500 Model Ss and 14,050 Model Xs in the fourth quarter, raising the total for the year to 99,394 compared with about 100,000 in 2017. The deliveries are below our estimates and the consensus estimates.
The company said more than three quarters of Model 3 orders in the last three months of the year were from new customers, rather than reservation holders, suggesting many consumers are still waiting to buy versions of the sedan at the long-promised $35 000 sticker price.
"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. In all, Tesla delivered 245,240 vehicles, which means the automaker is now in close company with any number of strong-selling established brands.
Tesla plunged after disappointing Model 3 deliveries and an across-the-lineup price cut prompted concerns that the carmaker may bump up against a ceiling for demand.