Tesla Slashes US Prices on Vehicles as Demand, Share Price Falter

Investor's Corner					Wall St. firm maintains Tesla $500 price target citing Model 3 gross margin surprise

Tesla stocks fell almost 9 percent in early trading Wednesday on the news that it missed analysts' fourth quarter delivery estimates, selling at $302.88.

Tesla (TSLA) is cutting the prices on all of its models by $2,000 to help offset a reduction in federal tax credits for drivers who buy electric vehicles.

According to Reuters' own calculations, Tesla gained around $3,200 per vehicle delivered in pre-tax earnings. Customers can apply to receive the $3,750 federal tax credit for new deliveries starting on January 1, 2019, and may also be eligible for several state and local electric vehicle and utility incentives, which range up to $4,000.

Tesla delivered 63,150 Model 3s in the quarter, falling short of FactSet estimates of 64,900.

The new pricing structure means that the cheapest version of the Model 3 is now $44,000 ($45,200 including mandatory destination and documentation fees).

Tesla delivered 99,394 of its Model S and X vehicles in 2018, just shy of its 100,000 goal.

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.

Wedbush analyst Daniel Ives, meanwhile, 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".

Despite this Tesla said that "combined with the reduced costs of maintenance and of charging a Tesla versus paying for gas at the pump, [our] vehicles are even more affordable than similarly priced gasoline vehicles".

The price cut only reinforced this idea, confirmed by Tesla shares plummeting 7 percent more. Production also ramped up during the fourth quarter, enabling the company to complete 86,500 vehicles, up 8 percent from the previous quarter.

A year ago was a turbulent one for Tesla, with Mr Musk fined and forced out as chairman by the U.S. financial regulator after he tweeted that he had secured funding to take private the company at $US420 a share.

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.

Tesla shares fell after the electric auto maker delivered fewer-than-expected Model 3 sedans in the fourth quarter and cut prices for all its vehicles in the US.

Related news:

Hot News

isis-killer-beheading-video-story-top Austin Waugh gets special call-up for fourth Test
Jan 03, 2019 - 07:13
The main difference between both the sides in the series so far is number of fifty-plus stands. More importantly, it will be the first ever Test series win for India on the Australian soil.

isis-killer-beheading-video-story-top Nasa probe extends horizons of mankind with fly-by of Ultima Thule
Jan 03, 2019 - 07:13
Ultima Thule is named for a mythical, far-northern island in medieval literature and cartography, according to NASA. "Think of it. These objects are remnants of the early Solar System, and, as such, studying them could reveal new insights into its formation.

isis-killer-beheading-video-story-top During Shutdown, National Parks Are Not Doing Well
Jan 03, 2019 - 07:12
Yosemite National Park is open and free because there are no rangers to collect entry fees. "A nightmare scenario", he says. At some parks, private companies have jumped in to handle some the maintenance normally handled by federal employees.

isis-killer-beheading-video-story-top Kurdish troops begin withdrawal from Syria’s Manbij
Jan 03, 2019 - 06:23
But after saying troops would come home right away, and that the Islamic State group was defeated, he didn't give any specific timetable.

isis-killer-beheading-video-story-top China’s Xi Jinping Says Taiwan Must Be Unified With Mainland
Jan 03, 2019 - 05:18
Yesterday, Tsai warned Beijing that Taiwan's people would never give up the kind of freedoms unseen on the authoritarian mainland. It's unclear how his message will be received by the 23 million people on the other side of the Taiwan Strait .

isis-killer-beheading-video-story-top Minivan Slams Into New Year's Revelers In Tokyo, Injuring 8 People
Jan 01, 2019 - 19:42
A police spokesman said the driver had been detained but has not given out any further details on the identity of the suspect. A 21-year-old suspect, named as Kazuhiro Kusakabe, was arrested and being questioned, Tokyo Metropolitan Police said.

isis-killer-beheading-video-story-top Clemson, Alabama ‘mirror images of each other’ entering title game, Dabo says
Jan 01, 2019 - 19:02
The teams were ranked first and second to begin the season, and Saban said he isn't surprised the two are playing for the title. "I think both teams are kind of mirror images of each other, to be honest with you", Swinney said.

isis-killer-beheading-video-story-top Kim calls for corresponding USA measures, ready to meet Trump
Jan 01, 2019 - 16:51
President Donald Trump hailed his June 12 summit in Singapore with Kim Jong-un as a breakthrough, and has expressed interest in a second meeting.

isis-killer-beheading-video-story-top Pirlo: Ramsey would be great for Juventus
Jan 01, 2019 - 16:17
Juventus are reportedly in pole position to sign Arsenal midfielder Aaron Ramsey , despite Paris Saint-Germain's advances.

isis-killer-beheading-video-story-top Samsung Galaxy S10: Production Started?
Jan 01, 2019 - 15:40
Budget Samsung Galaxy S10 Lite, which will compete with Apple iPhone XR , today appeared in a silicone case for the new renderer. This A series phone from Samsung is said to come in two variants - 4GB RAM/64GB storage and 4GB RAM/128GB storage.

isis-killer-beheading-video-story-top Congo orders European Union envoy to leave over sanctions
Dec 31, 2018 - 22:16
The Ebola virus is spread via infected bodily fluids, and some have anxious about using the touchscreens of voting machines. The latest postponement pushed the vote from December 23 to Sunday after a fire in Kinshasa, destroyed voting materials.

isis-killer-beheading-video-story-top Elizabeth Warren takes first steps towards 2020 run for the White House
Dec 31, 2018 - 19:15
Warren has spent most of her adult life in academia, doing groundbreaking research on consumer bankruptcy. President Barack Obama considered appointing her to run the new bureau but then passed on her.

isis-killer-beheading-video-story-top Germany: Drugged car driver tries to follow plane at airport
Dec 31, 2018 - 17:42
The driver could have been on drugs as the incident unfolded, NDR said, adding that the quick on-site drug test was " positive ". The man had tried to follow a plane operated by Greek airline Aegean, which was landing after a flight from Athens.

isis-killer-beheading-video-story-top Dipika Kakar Wins ‘Bigg Boss 12’ and Takes Home Rs 50 Lakhs
Dec 31, 2018 - 14:56
While talking about her journey, Dipika said it was full of high and low moments, which she would like to cherish forever. She said he helped her in improving her mistakes throughout the show."Salman sir is one of the kindest person".

isis-killer-beheading-video-story-top Eden Hazard replies when asked if he’ll extend his Chelsea FC contract
Dec 29, 2018 - 17:03
Belgium star Hazard again underlined his importance to Chelsea , racking up a league-high direct involvement in 19 goals for the Blues so far this term.