Tesla drops the price of all of its vehicles by $2,000

Tesla drops the price of all of its vehicles by $2,000

Tesla drops the price of all of its vehicles by $2,000

The decision to cut prices sent the company's shares value even lower than recent reports of a huge, unliquidated USA inventory.

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

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

The 63,150 Model 3s handed over to customers in the fourth quarter trailed the roughly 63,700 average analyst projection.

Now, Tesla has taken things a step further, opting to slash the price of its Model 3, Model S, and Model X vehicles by $2,000 across the board. That suggests many consumers are still waiting to buy versions of the vehicle at the long-promised $35,000 sticker price.

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".

Analysts cited by Reuters speculate that Tesla's decision to cut prices is aimed at mitigating the loss of the credit and maintaining the true price tag of the vehicles, including the problematic Model 3.

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The number represents a 7.7 percent increase over the 80,142 vehicles the company produced in the previous three-month period, and a new record for Tesla. The stock advanced 6.9 percent a year ago while most other auto manufacturers dropped. "The cars are quite expensive and they're still electric vehicles". Tesla announced today that it is now dropping the price of that particular Model 3 by $2,000, bringing it to $44,000.

It'll be a few more weeks before Tesla confirms whether it was profitable for a second consecutive quarter.

That said, the company built 53,239 Model 3s last quarter, so it's still improving on its base output.

At the same time, Tesla said it would cut the prices of its Model S, Model X and Model 3 by about £1,590 because tax credits for electric vehicles are due to end in the US.

Hargreaves Lansdown analyst Nicholas Hyett reportedly estimated in a client note that if Tesla continues to deliver cars at its current rate, the price cut will mean $700 million in lost revenue in 2019.

The Model 3, Tesla's mass market vehicle, saw sales of more than 145,000 previous year. Shares of Tesla rose 1.6 pct at $353.93 in morning trading. "To us, demand is not an issue, nor is EV competition to this point", Albertine added.

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