Tesla shares fall after carmaker falls short on delivery estimates

Fredrick Soto
January 3, 2019

Tesla announced a record-breaking number of fourth quarter deliveries on Wednesday, stating that it made homes for 90,700 vehicles since September.

The news also comes as automakers and analysts expect United States new vehicle sales to weaken in 2019. Analysts pegged Tesla to sell more than 96,000 vehicles as the fourth quarter ends. That's vastly better than where the company was a year ago, but significantly below the 6,000/week target Musk previously said Tesla would achieve by August 2018. The company's stock price fell nearly 10 percent upon opening (it has since rebounded slightly). Tesla said more than three-quarters of orders for the sedan in the year's final three months were from new customers, rather than reservation holders.

Tesla also produced a total of 25,161 Model S and X, which is consistent with its long-term run rate of around 100,000 units per year.

The Model 3, Tesla's mass market auto, saw sales of more than 145,000 previous year. Wall Street analysts had forecast 92,000 total deliveries - 64,900 for the Model 3, 14,200 for the Model S and 13,600 for the Model X, according to average estimates analysts compiled by FactSet. That suggests many consumers are still waiting to buy versions of the vehicle at the long-promised $35,000 sticker price.

"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.

Tesla will try to disguise the price cuts with the disappearing tax credit or discounts for buyers who refer other customers to Tesla, Ramsey said. Shares were last down 7.8% at $306.97.

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". Global deliveries in Europe and China will start in February 2019.

Tesla Inc. (TSLA.O) shares dropped as much as 10 per cent on Wednesday after the company reported fourth-quarter Model 3 deliveries just below estimates and said it would lower the price of its cars, prompting at least one analyst to flag the selloff as "overdone".

The company delivered 8 percent more vehicles during the quarter, a new all-time high, but the numbers were less than expected. The company announced it had delivered 63,150 vehicles in the quarter, up from 1,550 in the same period past year but below the 64,900 analysts had been expecting.

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