TeslaElectric carmaker, Tesla have announced their fourth quarter trading update, which showed production has risen 8% on the previous quarter – a record high – to 86,555 vehicles. However, deliveries of 90,700 were behind analyst estimates.
Tesla also announced that it was cutting the price of its US Model S, Model X and Model 3 by $2,000 (£1600). That aims to partially offset a fall in the federal Electric Vehicle tax credit, from $7,500 (£6000) to $3,750 (£3000).
The shares were down 8.2% in early trading following this announcement.
Ahead of the announcement, CEO Elon Musk urged all Tesla owners to take advantage of tax credits available to electric car users.
Reminder to US buyers that the $7500 tax credit cuts in half in 5 days! Order online at https://t.co/46TXqRrsdr to see if there is any inventory left in your region or visit Tesla stores.
— Elon Musk (@elonmusk) 26 December 2018
Nicholas Hyett, Equity Analyst at Hargreaves Lansdown commentd: “For most automotive groups these would be very impressive numbers – almost tripling the number of vehicles you deliver in just one year is no mean feat, and Musk and his team deserve a huge amount of credit. But unfortunately for Tesla shareholders, the market has come to expect Herculean achievements, and sometimes that means the bar is just that little bit too high. Deliveries have fallen short of what some analysts had expected and the shares are suffering as a result.
“Longer term we think the price cut is more concerning – it suggests Tesla customers are perhaps a bit more price sensitive than you might have thought. You can see why Tesla have made the decision – having got the production lines flying the company needs to ensure there’s demand for its cutting-edge technology when they make it off the conveyor belt. If the group continues to deliver cars at the rate it did last quarter, $2,000 off each and every vehicle would mean $700m in lost revenue in 2019. Not all those sales are in the US of course, but it’s far from ideal for a company which has only just made it into cash positive territory.””