Tesla shares drop as deliveries disappoint

By FinancialsFOXBusiness

Model 3 the key to Tesla's future?

Wedbush Securities Managing Director Daniel Ives on the outlook for Tesla and Apple in 2019.

U.S. electric automaker Tesla announced on Wednesday that fourth-quarter deliveries fell slightly short of expectations, at 90,700 vehicles, as shares fell during the trading session.

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TSLATESLA INC.298.92-3.34-1.10%

While increasing 8 percent and hitting an all-time high, the automaker’s production also disappointed.

Tesla said it produced at the rate of nearly 1,000 vehicles per day: For the entire quarter, production clocked in at 86,555 cars, including 61,394 Model 3 sedans and 25,161 Model S and X cars.

Analysts had anticipated Model 3 deliveries of about 64,900, according to CNBC.

In the third quarter, Tesla produced 53,239 Model 3s.

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Faced with a reduction of a key federal tax credit worth $7,500 on its electric vehicles – after the company passed the 200,000-vehicle-sales threshold over the summer – Tesla announced it would reduce the price of all of its models by $2,000. As of Jan. 1, the tax credit was slashed to $3,750 — it will be entirely phased out by 2020.

Tesla unveiled a lower-priced version of its Model 3 sedan in October, with a sticker price around $45,000. The Model 3 was intended as a way to bring the luxury electric vehicle to the average consumer. Musk has promised a version of the Model 3 with a base price of $35,000, which has yet to be realized.

The electric automaker said 1,010 Model 3s are set to be delivered to customers early in the first quarter of 2019.

This story has been updated.