Tesla Tumbles After Model 3 Deliveries Miss, Company Announces Price Cuts

It was hardly the fourth quarter numbers that Tesla enthusiasts wanted to see.

Tesla announced this morning that it had delivered 63,150 Model 3 vehicles in the fourth quarter, missing analyst estimates of 63,698. The company's 90,700 total vehicle deliveries also missed Wall Street estimates. To make matters worse, the company, led by a CEO who once told his employees to "NEVER discount" a car, was already reported to be slashing prices on models in the U.S., in addition to helping absorb the tax credit cut for customers : 

  • TESLA Q4 2018 VEHICLE PRODUCTION & DELIVERIES, ALSO ANNOUNCING
  • TESLA DELIVERED 63,150 MODEL 3 VEHICLES IN 4Q
  • TESLA STEPS TO PARTIALLY ABSORB CUT OF FEDERAL EV TAX CREDIT
  • TESLA CUTTING PRICE MODEL S, MODEL X & MODEL 3 VEHICLES IN U.S.
  • TESLA SHARES EXTEND LOSS TO 4.2% ON 4Q DELIVERIES, PRICE CUTS

This comes after the company has already slashed prices in China several times. Tesla stock tumbled as much as 7% in pre-market trading, after already having fallen moments earlier on a pessimistic note from Nomura:

It's no surprise that some longtime critics of the company remembered that this run-rate is nowhere near the 10,000 cars per week Musk once promised:

Earlier this morning, Nomura released a note confirming that Tesla's fourth quarter will likely be followed by a major drop-off in demand. The note, entitled "Mind the Gap Overseas" stated Tesla's fourth quarter would likely be "as good as it gets" for deliveries, at least for the next couple of quarters.

Nomura analyst Romit Shah based his reasoning on an in-transit lag, combined with the drop off of the United States federal tax credit and lower US Model 3 backlog.

Shah expected Tesla's Model 3 volumes to be in the low to mid 60,000 range for the fourth quarter. Shah stated earlier this morning that there will likely be an opportunity to accumulate shares at a better price as a result of the drop off. So far, he's about 7% right. 

Just days ago, we reported that Tesla had over 3300 Model 3 vehicles readily available in its inventory, despite the company’s goal of trying to run through all of its United States inventory with the federal tax credit drop off acting as a catalyst.