Tesla Stock Price Recovering After Start-Of-Year Drop

JAN 7 2019 BY JAMES FOSSDYKE 11

The end of government EV grants in the US and subsequent price drops have caused Tesla’s share price to fall, but it’s back on the rise now.

Tesla‘s tricky year led to its share prices falling by over nine percent at the end of 2018, following the announcement of Model 3 delivery numbers for the final quarter of last year.

The California carmaker cut prices across its entire range to offset government grant reductions, but only managed to shift 63,150 Model 3s in the fourth quarter of 2018, which fell short of FactSet estimates of 64,900 sales of its ‘entry-level’ model, according to Reuters.

“The price cut is what’s driving the stock lower, as it openly acknowledges the sunset of subsidy dollars is a material headwind,” Roth Capital Partners analyst Craig Irwin.

In the US, the tax credit for electric vehicles will be cut by half every six months until it is gone completely for companies that have sold at least 200,000 cars.

Tesla had predicted it would enjoy an upturn in sales towards the end of the 2018 as customers looked to get in before the government grant disappeared, but it was those strong predictions that ultimately led to disappointment and a share price slump. In the final quarter its overall deliveries stood at 90,700 cars, up eight percent.

For 2018 as a whole, Model 3 sales ramped up as the year went on. In both May and June the car sold 6,000 units in the US. That number increased to 14,250 in July, 17,800 in August, and 22,250 by the end of Q3. Motor1.com’s sister publication InsideEVs has since predicted that 25,250 Model 3s in 2018 which, again, represented a marked increase over the course of the year in the manufacturer’s domestic market, but worldwide it still fell short of expectations.

“Tesla disappointed the market. The deliveries are below our estimates and the consensus estimates,” Frank Schwope, an analyst with NORD/LB is quoted my Reuters. “I don’t expect that Tesla operates in the black in 2019.”

Steadying production of the Model 3, Tesla’s only real mainstream model, is seen as key to helping the company’s share price and profitability. Tesla has never posted an annual profit, but it did post a net income of £243.4 million in the third quarter of 2018, which is the firm’s first GAAP (generally accepted accounting principles) profit in two years.

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11 Comments on "Tesla Stock Price Recovering After Start-Of-Year Drop"

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Shouldn’t be a surprise Tesla has already sold it 500,000 vehicle and will reach a million sold in 15 months making it the first major car company in a century.
Battery storage will triple this year and growth between 30-40% for at least the next 5 years.

I thought this sight was not a financial site? I keep seeing more and more headlines about Tesla financials. Why not include Hyundai’s, GM’s and VW if you’re going down that path?

Pertains to Tesla sustained viability which is useful consumer info for people in the market for an expensive consumer product that will need its producer’s support for the~15 years of its life expectancy. Who knows maybe in the not so distant future it’s GM’s financials that’s a recurring topic on this forum, while nobody cares anymore about how much money Tesla raked in last quarter, wouldn’t that be fun.

What is the ev range on the stock price?

Like the Falcon 9.
Funny when the story was about Tesla going bankrupt did you complain.

Sure did. You are not paying attention.

Oh I see your hoping Tesla fails. Look at the stock this morning.

I’m a fan, you douche! I just can’t stand financial crap on here…i get enough TSLA crap on SA.

Terrible speculative negative short thesis junk article and I’m surprised to see it on this site. I can’t see how model 3 sales could be seen as falling short, with the insane growth rate (never before seen in the history of car companies) and fact that they are dominating not just the EV market but many other “conventional” vehicle markets as well. With Wall Street’s limited “profit above all else” perspective, it may seem like Tesla dropping prices is conceding to some sort of demand issue because of the diminishing EV tax credit. However, I expect Tesla to continue dropping their prices, not as a demand lever, but as part of their mission to accelerate renewable transportation to the masses and as they achieve higher cost efficiency (both positive things). Tesla has many market levers to pull, so that isn’t an issue, and dropping their prices may actually be an indicator that they are achieving higher production efficiencies. Wall Street is a blood sucking leach, which needs to be put in check or dismantled. Short Enrichment Commission indeed. At least we can feel confident that the TSLA stock roller coaster noise is just the Street’s regular daily fraudulent stock manipulation… Read more »

I don’t know why get mad just buy more on the dips.

There are people who invest without reading quarterly reports or listening to the Tesla customers. I have no sympathy for them.