Chief Executive Elon Musk, who has often set goals and deadlines that Tesla has failed to meet, surprised investors by delivering on his pledge to make Tesla profitable in the third quarter, for only the third time in its 15-year existence. But the company is unprofitable for the first nine months of 2018, and cash flow remains a concern for investors.
The company said it would begin delivering Model 3s to Europe and China in February.
Tesla on Wednesday cut US prices for all its vehicles to offset lower green tax credits, and fell short on quarterly deliveries of its mass-market Model 3 sedan, sending shares of the electric vehicle maker down nearly 7 percent on worries of future profitability.
Analysts questioned whether the $2,000 (roughly Rs. 1.4 lakhs) price cut on all models signaled lower demand in the United States, and ultimately whether the move would undermine nascent profitability at the Silicon Valley automaker, which has never posted an annual profit.
Musk has been under intense pressure to deliver on his promise of stabilizing production for the Model 3, which is deemed crucial for easing a cash crunch and achieving long-term profitability. It said it was churning out almost 1,000 Model 3s daily, broadly in line with Musk's promises but slightly short of Wall Street expectations.
The price cut of $2,000 beginning on Wednesday on the Model 3 – as well as on its higher-priced Model S and Model X – took the market by surprise and weighed on the stock, pushing it down 6.8 percent to close at $310.12, after falling as much as 10 percent during the session.
Tesla delivered 63,150 Model 3s in its fourth quarter, falling short of FactSet estimates of 64,900. Tesla said that based on its own compilation of analysts' forecasts, its delivery numbers were in line with market expectations.
Total deliveries rose from the third quarter to 90,700 cars, but missed forecasts, which had been influenced by analysts' expectations of a surge in buyers looking to cash in on the tax credit before year-end.
The automaker's third-quarter pre-tax profit was around $3,200 per vehicle delivered, but for the first nine months of 2018, the company suffered a third-quarter loss per vehicle delivered of $8,019.
The automaker's third-quarter pre-tax profit was around $3,200 per vehicle delivered, but for the first nine months of 2018, the company suffered a third-quarter loss per vehicle delivered of $8,019. Overall, total production rose 8 percent to 86,555 vehicles. The company churned out 61,394 Model 3s, up from a total of 53,239 Model 3s in the third quarter.
"Tesla disappointed the market. The deliveries are below our estimates and the consensus estimates. I don't expect that Tesla operates in the black in 2019," said Frank Schwope.