Tesla shares fall after carmaker falls short on delivery estimates

Tesla shares fall after carmaker falls short on delivery estimates

Tesla shares fall after carmaker falls short on delivery estimates

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

Although the delivery numbers were 2,000 fewer than expected in a FactSet survey of analysts, Wedbush Securities analyst Dan Ives told CNBC they were consistent with his prediction. Tesla delivered 13,500 Model Ss and 14,050 Model Xs in the fourth quarter, raising the total for the year to 99,394 compared with about 100,000 in 2017. Despite the increase, shareholders felt a certain unsteadiness as stock prices declined and investors expressed their disappointment over failed expectations to close out the year.

Whereas Tesla began 2018 with production being the big challenge, chief executive officer Elon Musk is starting this year with worries about how much of a market is left for pricier versions of the Model 3.

Musk previously stated that Model 3 reservations had surged to over half a million, but on a recent conference call he went back on this statement saying: "To be more accurate, there have been 518,000 gross reservations for Model 3 and then we have 455,000 net reservations".

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 Shanghai Gigafactory, based in eastern China, aims to manufacture Model 3 and Model Y cars, with annual capacity of 250,000 vehicles, according to a filing.

As of writing, Tesla stock is trading down 7.45% at $308.00 per share.

But the auto maker is now also grappling with the phasing out of tax credits in the U.S. which made buying electric vehicles less expensive. I don't expect that Tesla operates in the black in 2019, ' Frank Schwope, an analyst with NORD/LB said.

"Longer term we think the price cut is more concerning - it suggests Tesla customers are perhaps a bit more price sensitive than you might have thought", Hargreaves Lansdown analyst Nicholas Hyett write in a client note. Tesla also claimed to have boosted their production levels in the fourth quarter significantly, from 80,142 in the third quarter to 86,500 in the fourth.

The company now is moving into an important phase of its business and will have to decide whether to cut production to match what appears to be waning demand, or discount its vehicles to stimulate sales like other automakers do, Gartner analyst Michael Ramsey said.

The company's deliveries for the full year matched Wall Street estimates, but its figures for the fourth quarter didn't reach expectations.

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