Tesla shares dive after Model 3 delivery falls short of estimates
Bengaluru — Tesla shares sank 9% on Wednesday after the electric-vehicle maker delivered fewer-than-expected Model 3 sedans in the fourth quarter and cut prices for all its vehicles in the US in response to the loss of a green tax credit.
The company said it delivered 63,150 Model 3s in the quarter, falling short of FactSet estimates of 64,900.
Tesla shares were down 8.4% at $304.91 in pre-market trade.
Overall, total production rose 8% to 86,555 vehicles. The company produced 61,394 Model 3s, up from a total of 53,239 Model 3s in the third quarter, but showed no improvement on the 5,000 per week rate it finally achieved at the end of the third quarter.
Tesla has been struggling to ramp up production of its Model 3 sedan, which is crucial to the company’s long-term profitability.
The company said in its third quarter results that it would focus in the fourth quarter on further increasing its production rate, and there were indications that Wall Street had been expecting higher numbers.
Starting on Wednesday, the company said it will be reducing the price of Model S, Model X and Model 3 vehicles in the US by $2,000.
Tesla has been urging buyers to make use of the federal tax credit, with CEO Elon Musk reminding them on Twitter on Saturday that the benefit would drop to half from the start of 2019.