Shares of Tesla (TSLA 309.20, -23.60, -7.09%) are trading lower after
the company reported fourth quarter production and delivery figures that were
below estimates this morning.
Fourth quarter production was up 8% sequentially to 86,555 and deliveries were up 8% sequentially to 90,700. Production estimates were closer to 90,000 for the quarter.
Deliveries of the Model 3 grew 13% sequentially to 63,150, narrowly missing estimates. Tesla noted that Q4 Model 3 deliveries were limited to mid- and higher-priced variants, cash/loan transactions, and North American customers only. More than three quarters of Model 3 orders in Q4 came from new customers, rather than reservation holders.
Tesla also noted, "There remain significant opportunities to continue to grow Model 3 sales by expanding to international markets, introducing lower-priced variants and offering leasing. International deliveries in Europe and China will start in February 2019. Expansion of Model 3 sales to other markets, including with a right-hand drive variant, will occur later in 2019."
The company also announced a $2,000 price reduction on its EVs in the U.S. to offset the reduction of the federal electric vehicle tax credit to $3,750 from $7,500 starting this year. While Tesla is no stranger to missed forecasts, the disappointing result has stoked fears about the evolving investment thesis.
Demand has never been an issue in the past, but bears remain skeptical about demand for the Model 3.
Naysayers are also skeptical about the company's bottom line performance after the company reported a surprise profit in the third quarter. Some think the better cost performance was an aberration even though the company guided for further improvements going forward.
Tesla will likely unveil fourth quarter financials in early February. Investors are hoping for a less-volatile 2019 after a wild ride in 2018.
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