Tesla sinks as price cuts signal a ceiling for costlier models

Jeannie Matthews
January 3, 2019

But it also said it would cut prices of its three models by $2,000 to help customers handle the gradual phase-out of federal electric vehicle tax credits.

But while Tesla boosted the total number of vehicles it manufactured in the quarter by ~8 percent, it came in below Wall Street expectations and does not appear to have quite maintained its target 5,000 vehicles/week production target for the Model 3.

To soften the blow of their cars' high price tags, Tesla has always offered federal EV tax credits to U.S. residents; usually amounting to around $7500 in total savings.

Tesla will be announcing its Q4 financials later this month.

Tesla delivered 99,394 of its Model S and X vehicles in 2018, just shy of its 100,000 goal. The company also told investors in late October that it took less time to build than the Model S sedan and Model X sport utility vehicle - another first for the company.

Tesla also announced a $2,000 price cut on all of the Model 3, Model S and Model X to help USA purchasers, who will get only a $3,750 federal tax credit over the next six months, down from the previous $7,500.

Harry Kane scores early as Tottenham cruise past Cardiff
Tottenham Hotspur boss Mauricio Pochettino has "no news" on Christian Eriksen's contract situation with the Premier League club. Spurs beat Cardiff 3-0 on Tuesday evening to regain some traction after their disappointing home loss to Wolves.

Australian police respond to spider death threats
Minutes later police were relieved to discover no one had been injured in the incident - except an unlucky home-invading spider. A spokesman for WA police said the post had only been deleted because it included the screenshot of police communications.

Right-wing leader Jair Bolsonaro sworn in as Brazil's president
Bolsonaro has also said he admires Trump, with whom he shares nationalist instincts and a disdain of multilateral organizations. In foreign policy, Bolsonaro has signalled he plans major changes.

The company announced the price cut Wednesday as it released delivery results for the fourth quarter that disappointed investors and sent shares south by more than 9 percent.

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".

Even so, analysts had expected more of the electric carmaker, anticipating that it would complete 92,700 deliveries across its Model 3, Model S sedan, and Model X SUV.

Deliveries to customers in Europe and China will begin in February, the company said.

"The price cut is what's driving the stock lower, as it openly acknowledges the sunset of subsidy dollars is a material headwind", said Craig Irwin, an analyst with Roth Capital Partners.

"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. Tesla has been through hell in 2018, thanks in no small part to the antics of its CEO.

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER