Tesla shares go into reverse on missed deliveries and price cuts

Model 3					Tesla adjusts Model 3 prices amid lowered $3,750 federal tax credit

The electric vehicle maker said it would cut the price on its cars by US$2,000, to help make up for USA buyers now being eligible for only a US$3,750 federal tax credit for the next six months, half of what they previously received.

The full US$7500 (NZ$11,270) tax credit for Tesla customers was cut in half to US$3750 at the start of the new year.

Tax credits on its vehicles contributed to that profit.

Now, Tesla has taken things a step further, opting to slash the price of its Model 3, Model S, and Model X vehicles by $2,000 across the board. The more than 90,000 deliveries that Tesla was able to accomplish in Q4 translates to about 1,000 vehicles per day - a notable feat for such a young carmaker. Tesla also claimed to have boosted their production levels in the fourth quarter significantly, from 80,142 in the third quarter to 86,500 in the fourth.

Tesla has released its production and delivery figures for the fourth quarter of 2018, capping off what could only be described as a historic year for the electric vehicle maker.

FactSet, which compiled an average estimate from nine analysts, projected that Tesla would deliver 2000 more vehicles than it did, including 1750 more Model 3 vehicles.

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In a client note Wedbush analyst Daniel Ives 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".

The $2,000 cut in prices, however, weighed on the stock, pushing it down 9.4 percent to $301.69 in morning trade on a broadly weaker day for US markets.

Shares in Elon Musk's Tesla plunged 10 per cent after the electric vehicle maker cut prices and missed production targets.

The Shanghai Gigafactory, based in eastern China, aims to manufacture Model 3 and Model Y cars, with annual capacity of 250,000 vehicles, according to a filing.

Tesla fell just short of its target to deliver 100,000 of its more expensive Model S and Model X vehicles for the year, selling 99,394 units. The vehicle has been delivered only to North American customers and in its mid to higher priced configurations.

"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 in a press release.

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