Tesla cuts prices on poor Q4

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Tesla (TSLA) disappointed investors Wednesday, announcing that it delivered 90,700 vehicles during the fourth quarter - short of Wall Street forecasts despite its efforts to ramp up production. Seemingly as a way to highlight the demand for the vehicle, the company pointed out that more than 75% of Model 3 orders in Q4 came from new customers, not reservation holders.

CNBC reports that Elon Musk's Tesla has yet again run into another stumbling block, once again failing to meet its expected fourth quarter delivery estimates. The company's stock price fell nearly 10 percent upon opening (it has since rebounded slightly).

With Musk having generally reigned in his own behavior and the company's Model 3 production figures much closer to weekly production targets, the alarm bells that were ringing six months ago have quieted considerably.

Tesla's shares sank heavily in morning trading, falling over 9% when markets opened.

Tesla's cars are some of the most popular electric vehicles out there, but there's no denying that they are also pretty expensive.

Deliveries to customers in Europe and China will begin in February, the company said.

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Tesla said it was churning out nearly 1,000 Model 3s daily, broadly in line with Mr Musk's promises but slightly short of Wall Street expectations.

Even so, analysts had expected more of the electric carmaker, anticipating that it would complete 92,700 deliveries across its Model 3, Model S sedan, and Model X SUV.

Longer-term we think the price cut is more concerning. This number is comprised of 63,150 Model 3 (signifying a 13% growth over Q3), 13,500 Model S, and 14,050 Model X vehicles.

As of writing, Tesla stock is trading down 7.45% at $308.00 per share. Previously, Tesla buyers had been eligible for a $7,500 federal tax credit on electric vehicle purchases, but as of January 1, the federal government has trimmed that credit to $3,750. The company's production grew to 86,555 vehicles, up 8 per cent from the high set in the past quarter.

In a client note Wedbush analyst Daniel Ives 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". In comparison, Wall Street projected 64,900 for the Model 3, 14,200 for the Model S and 13,600 for the Model X, based on average figures from previous quarters compiled by FactSet.

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