Tesla shares are down 8.4 per cent at $304.91 in pre-market trade. Its stock rebounded somewhat by the afternoon to about $313 a share, down by about 6 percent from Monday's close of $332.80.
But the price cut of $2,000 on the model took the market by surprise and weighed on the stock, pushing it down 9.4% in morning trade on a broadly weaker day for USA markets. Tesla buyers will now receive $3,750 in tax rebates instead of $7,500, so the company trimmed prices by $2,000 to partially offset the lost credit. Analysts questioned whether the $2,000 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.
"It was a move that was within the realm of possibility, but it caught investors off-guard", Ives said.
The full US$7500 (NZ$11,270) tax credit for Tesla customers was cut in half to US$3750 at the start of the new year.
The company says it produced almost 87,000 vehicles in the fourth quarter, also 8 per cent above its previous quarterly record set in the third quarter. The carmaker also reported fourth-quarter deliveries that fell just short of analysts' estimates. The numbers vary since FactSet tracks nine analysts on total deliveries, but not all analysts break out the data for each model. Tesla said that based on its own compilation of analysts' forecasts, its delivery numbers were in line with market expectations.More news: Trump, Reacting to Pushback, Slows Syria Troop Withdrawal
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In 2018, we delivered a total of 245,240 vehicles: 145,846 Model 3 and 99,394 Model S and X. To put our growth into perspective, we delivered nearly as many vehicles in 2018 as we did in all prior years combined. The company also told investors in late October that it took less time to build than the Model S sedan and Model X sport utility vehicle - another first for the company. Model S and X production fell slightly year-on-year, but this was in-line with expectations and likely the result of the company's intense focus on pushing Model 3 development.
Specifically, the company produced 63,150 Model 3 sedans.
Tesla said it was churning out nearly 1,000 Model 3s daily, broadly in line with Mr Musk's promises but slightly short of Wall Street expectations.
Reuters calculated that Tesla's third-quarter pretax profit was around $3,200 per vehicle delivered.