Tesla starts taking Model 3 orders in China

by Ben Pena January 3, 2019, 0:58
Tesla starts taking Model 3 orders in China

The missed expectation is especially noteworthy because the fourth quarter of 2018 was the last period during which customers could earn a major federal tax credit for buying an electric vehicle, which would have boosted sales.

Now, Tesla has taken things a step further, opting to slash the price of its Model 3, Model S, and Model X vehicles by $2,000 across the board.

Tesla boss Musk is under intense pressure to deliver on production promises, with the Model 3 billed as its first mass market vehicle and its path to profitability.

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

Also on Wednesday, General Motors said it had sold its 200,000th electric vehicle in 2018, similarly triggering a phase-out of the federal tax credit, according to a source. The Model 3 Long Range starts at $52,200 and the Performance-which in October added the Performance Upgrade at no extra charge-lists at $63,200.

Shares in Tesla Inc dropped as much as 9 percent on Wednesday on worries of future profitability, after the electric auto maker cut USA prices for all its vehicles to offset lower green tax credits, while falling short on quarterly deliveries of its mass-market Model 3 sedan.

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Tesla shares fell as much as 9.7% to $300.52 as of 9:36 am on Wednesday in NY.

"This was a good quarter in terms of production ramp and strong underlying demand, but Tesla came up shy of bull expectations and this will be the focus of the street", Daniel Ives, an analyst at Wedbush Securities, said in an email. Now, Tesla buyers only get half that credit, or $3,750, for the next six months, before it falls to $1,875 in July. However, the company delivered just 63,150 Model 3s in the fourth quarter, missing analyst targets by 1,750 vehicles.

The electric auto maker delivered 63,150 Model 3 vehicles in Q4 2018 versus the expected 63,698.

"There remain significant opportunities to continue to grow Model 3 sales by expanding to worldwide markets, introducing lower-priced variants and offering leasing", Tesla said. Worldwide deliveries in Europe and China will start in February 2019. The vehicle has been delivered only to North American customers and in its mid to higher priced configurations.

A link to Tesla's Q4 2018 full report can be found here.

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