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article imageTesla shares tumble on lackluster delivery numbers

By Karen Graham     Jan 2, 2019 in Business
Tesla disappointed investors Wednesday, announcing that it delivered 90,700 vehicles during the fourth quarter — short of Wall Street forecasts despite its efforts to ramp up production. Shares in Tesla fell by more than 9 percent in morning trading.
Elon Musk is still under pressure to make his electric car company turn a profit, and going into the new year, coming up short on fourth-quarter deliveries was not the way to start 2019, even though Tesla did boost production during the quarter, churning out 86,555 vehicles, up 8 percent from 80,142 during the third quarter.
To add to the bad news - only 61,394 Model 3s were produced in a 13-week quarter, Tesla produced an average of 4,722 Model 3s per week in the December quarter, short of the 5,000 Musk has promised.
But when Tesla announced it was initiating a $2,000 across-the-board price cut on Models S, X and 3 in the United States, the news pushed Tesla shares down 9.4 percent to $301.69 in morning trading that started out in the red. Tesla says the price reduction is in response to the federal tax credit on electric cars being cut in half, from $7,500 to $3,750.
"Tesla shares tend to a have a lot more noise and volatility than most, but we think investors who are willing to take a longer-term view of the story will be rewarded handsomely and continue to believe Tesla is on track to post one of the market's most robust year-over-year earnings increases in 2019," said CFRA analyst Garrett Nelson, according to CNBC News.
Wedbush Securities analyst Dan Ives told CNBC that coming up short on new car deliveries by 2,000 was expected, based on a FactSet survey of analysts, and were consistent with his prediction. He says the cut in prices likely was responsible for the drop in shares. "It was a move that was within the realm of possibility, but it caught investors off guard," he said.
Tesla delivered 63,150 Model 3s in the quarter, falling short of FactSet estimates of 64,900. The automaker planned on liquidating every car in its US inventory by the last day of the year. However, on December 31, there were slightly over 3,000 new Model 3s still in inventory.
More about Tesla, shares tumble, delivery quota, price cut on medels, Business
 
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