Tesla delivers record number of vehicles, cuts prices by US$2,000

Tesla delivers record number of vehicles, cuts prices by US$2,000

Tesla delivers record number of vehicles, cuts prices by US$2,000

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. Analysts polled by data provider FactSet expected 92,000. Analysts pegged Tesla to sell more than 96,000 vehicles as the fourth quarter ends.

The company said in its third quarter results that it would focus in the fourth quarter on further increasing its production rate and there were indications that Wall Street had been expecting higher numbers.

Mr Musk, who has often set goals and deadlines that Tesla has failed to meet, surprised investors by delivering on his pledge to make Tesla profitable in the third quarter, for only the third time in its 15-year existence.

Tesla Banks on Model 3 Production ImprovementsLos Angeles, USA - November 30, 2017: Tesla Model 3 on display during LA Auto Show at the Los Angeles Convention Center.

The company said in a statement before the markets opened that it delivered over 245,000 electric cars and SUVs last year, almost as many as all previous years combined.

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Musk previously stated that Model 3 reservations had surged to over half a million, but on a recent conference call he went back on this statement saying: "To be more accurate, there have been 518,000 gross reservations for Model 3 and then we have 455,000 net reservations". This number is comprised of 63,150 Model 3 (signifying a 13% growth over Q3), 13,500 Model S, and 14,050 Model X vehicles. The analyst said demand for Tesla vehicles, most notably the Model 3, remained strong leaving 2018 and entering 2019.

Longer-term we think the price cut is more concerning.

The $2,000 price reduction is meant to soften the blow of the reduced tax credit, but doesn't completely offset the shortfall. Shares were last down 7.8% at $306.97. The carmaker also reported fourth-quarter deliveries that fell just short of analysts' estimates.

The missed expectation is especially noteworthy because the fourth quarter of 2018 was the last period during which customers could earn a major federal tax credit for buying an electric vehicle, which would have boosted sales.

Overall, total production rose 8% to 86,555 vehicles.The company churned out 61,394 Model 3s, up from a total of 53,239 Model 3s in the third quarter.

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