Tesla triples deliveries of electric cars but share price tumbles

Ahead of the price cut announcement, chief executive Elon Musk urged Tesla customers to make use of federal tax credits.

Musk now plans to turn attention to filling Model 3 orders in Europe and China starting in February, which could help offset some of the potential drop in United States demand linked to the shrinking tax credit.

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.

Shares of electric auto and solar panel maker Tesla Inc. tumbled Wednesday, Jan. 2, 2019, morning after the company cut vehicle prices by $2,000 and announced fourth-quarter sales figures that fell short of Wall Street estimates.

Tesla's vehicle deliveries fell short of Wall Street analysts' expectations as the Silicon Valley automaker wrestles with the realization that its federal tax credits are quickly running out. 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.

Tesla shares fell in early trading after the electric auto maker missed industry forecasts for deliveries of its budget Model 3 vehicle and announced price cuts to offset lower tax incentives.

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Tesla has released its production and delivery figures for the fourth quarter of 2018, capping off what could only be described as a historic year for the electric vehicle maker.

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.

Ives added that Tesla shares are "hypersensitive to any issue around Model 3" and that it will remain a stock that is "guilty until proven innocent" until it discloses quarterly earnings figures next year.

In the fourth quarter, Tesla delivered 63,150 Model 3s, 13,500 Model S sedans and 14,050 Model X SUVs.

'The price cut is what's driving the stock lower, as it openly acknowledges the sunset of subsidy dollars is a material headwind, ' Craig Irwin, an analyst with Roth Capital Partners. Global deliveries in Europe and China will start in February 2019.

Tesla recognizes that these incentives are major selling points for their vehicles - that's why the company formed the "EV Drive Coalition" with other prominent EV makers in late 2018. The company's production grew to 86,555 vehicles, up 8 per cent from the high set in the past quarter. Analysts polled by data provider FactSet expected 92,000.

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