Tesla shares fall on price cut, soft Model 3 deliveries

Tesla shares fall on price cut, soft Model 3 deliveries

The news also comes as automakers and analysts expect USA new vehicle sales to weaken in 2019.

"Combined with the reduced costs of maintenance and of charging a Tesla versus paying for gas at the pump - which can result in up to $100 per month or more in savings - this means our vehicles are even more affordable than similarly priced gasoline vehicles", Tesla said.

Shares slid 8.4pc in early dealing, wiping $5bn (£4bn) off its market value, as the company reported that in the three months to the end of December it delivered a total of 90,700 cars, up 8pc on the record set the previous quarter. The company's stock price fell nearly 10 percent upon opening (it has since rebounded slightly). This suggests that many existing reservation holders are still waiting for the cheaper $35,000 vehicle that Tesla has promised but doesn't yet build. 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.

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.

Chief Executive Officer Elon Musk said, "Probably some deliveries in March, but April is more certain", after a Twitter user asked when the deliveries in China would begin.

Rows of new Tesla Model 3 electric vehicles are seen in Richmond, California. "We also believe the $2,000 price cut to help subsidize the lower EV tax credit is a move that was not fully expected". Shares were last down 7.8% at $306.97.

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"The price cut is what's driving the stock lower, as it openly acknowledges the sunset of subsidy dollars is a material headwind", he said.

But the auto maker is now also grappling with the phasing out of tax credits in the United States which made buying electric vehicles less expensive.

The 63 150 Model 3s Tesla handed over to customers in the fourth quarter trailed the roughly 63 700 average analyst estimate.

The company delivered 8 percent more vehicles during the quarter, a new all-time high, but the numbers were less than expected.

"This was a good quarter in terms of production ramp and strong underlying demand, but Tesla came up shy of bull expectations and this will be the focus of the street", Daniel Ives, an analyst at Wedbush Securities, said in an email.

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