Tesla Stocks Drop After Deliveries Break Record But Fall Short of Analyst Expectations

Illustration for article titled Tesla Stocks Drop After Deliveries Break Record But Fall Short of Analyst Expectations
Photo: Background Photo (AP Images)

With the market reacting negatively to Tesla’s fourth quarter deliveries falling short of estimates and the loss of a full EV tax credit, Tesla stocks closed out the day 7 percent down from where they closed on Monday, marking a rough start for the automaker in the new year.

Advertisement

Despite continued growth in production and deliveries, Tesla got a bit of a beating today after it announced a record high 90,700 vehicles delivered in the last quarter of 2018, which was just short of meeting analyst projections of 92,000 deliveries, according to CNBC.

What potentially had a greater impact on the stock price was the $2,000 price cut across the board of Tesla’s lineup, which we reported on earlier today. Sometimes companies cut the price of a product to incentivize buyers and boost demand, particularly if a car isn’t selling as hot as desired or if there’s too much inventory.

But that’s probably not the case with Tesla, who claims the price cuts are to help balance out the fact that customers lost the full $7,500 federal tax credit at the end of 2018, which is now down to $3,750.

Essentially, Tesla’s stock price took a punishing today because analysts read a lot into Musk’s claims of increased efficiency of production after the third quarter last year, and because Tesla was trying to minimize the impact of the federal credit being cut by half.

Tesla will release its full earnings report later this month, which will likely show a lot of growth in 2018 and cause the market to react positively, so today’s drop likely doesn’t matter too much.

Reviews Editor, Jalopnik

DISCUSSION

goat7
son of a motherless goat (PSA: wash your hooves)

...it announced a record high 90,700 vehicles delivered in the last quarter of 2018, which was just short of meeting analyst projections of 92,000 deliveries...

Tesla gets 99% of the way to meeting some arbitrary growth projection — stock drops 7%. This is why I don’t understand the stock market. Well, one of the reasons.