Tesla Had a Record Quarter, so Why Did its Shares Just Nosedive?

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For the Model 3, that amounts to an average rate of 4,722 vehicles per week over the quarter-a fair amount below the 5,000/week rate that Tesla CEO Elon Musk said would be required to make the auto profitable in 2018.

The company also announced on Wednesday that it was cutting the price of its Model S, Model X and Model 3 vehicles by $2,000 in the US.

Compounding investor anxiety was the company's announcement that it would slash prices on all Tesla models by $2,000, with the price cut meant to offset a reduced federal tax credit that took effect on Tuesday.

Its shares fell by about 8% at the start of United States trading.

Tesla stock (NASDAQ:TSLA) has fallen more than 7% on Thursday's trading, partly due to the company's 63,150 Model 3 deliveries falling slightly short of FactSet estimates of 64,900.

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Tesla delivered 90,700 vehicles during the fourth quarter, a new all-time high, closing the year with a total of 245,240 deliveries compared to 102,807 in 2017.

Tesla and its CEO Elon Musk made a multi-layered end-of-year push, focused on Tesla's final days and weeks of $7,500 federal EV tax credit eligibility. Tesla said fourth-quarter deliveries were eight per cent higher than its previous high in the third quarter of 2018.

Nevertheless, Baird analyst Ben Kallo noted in a recent report that demand for the Model 3 would likely be strong, particularly as deliveries to other countries are expected to begin this 2019.

The company's deliveries for the full year matched Wall Street estimates, but its figures for the fourth quarter fell short.

The company says it produced almost 87,000 vehicles in the fourth quarter, also eight per cent above its previous quarterly record set in the third quarter. 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. This number is comprised of 63,150 Model 3 (signifying a 13% growth over Q3), 13,500 Model S, and 14,050 Model X vehicles.

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