Tesla shares sank the first trading session of 2019 after the company said it was cutting its prices across vehicles by $2,000 in the U.S. The move was meant to help absorb the reduction in the federal electric vehicle tax credit, which halved to $3,750 from $7,500 as of January 1. This is a little less than Wallstreet had expected, and so shares fell slightly when the market closed today.
It forecast strong growth, as Model 3 vehicle sales start in Europe and China.
To put this into the long-term perspective, the Californian group is forecasting sales of just under 21.5 billion dollars for the whole year - nearly twice as much as in the previous year.
Tesla reported its cash position improved by about $1.5 million during the quarter even as it repaid $230 million in convertible notes.
Tesla shares rose by 3% Wednesday to more than $307 apiece. The company has posted its second profitable quarter in a row, and Model 3 production has reached a point where the vehicle could be delivered to global markets. The company also projected it would be producing 7,000 Model 3s a week by the end of 2019, up from the current 5,000. In Q4 a year ago, they brought 63,359 units of the electric sedan to customers. Six analysts surveyed by Zacks expected $7.14 billion.
Bullish Tesla analyst Colin Rusch of Oppenheimer told clients Monday that "Model 3 demand, production, and margin" will be the primary drivers of the stock this year.
Tesla is scheduled to report fourth-quarter earnings after Wednesday's closing bell. "Turning a profit, creatively addressing production challenges and getting the Model 3 to the masses were huge milestones, but keeping up this momentum is going to be virtually impossible". Critics alleged that unfinished cars were counted by Tesla toward that goal and cars built in a tent at its Fremont factory were flawed. Guillen said the first Semis will be used for Tesla's own logistics, so its first inline until its shipping fleet is full. The EV maker had kept prices low despite a hike in import duties.
By the end of 2020, Tesla said it should begin building its Model Y small crossover, most likely at its Gigafactory in Nevada. I feel we're starting 2019 with a very strong financial foundation. In Musk's letter earlier this month, he called past year "the most challenging in Tesla's history".
Another growth sector was infrastructure, and Tesla claims: "In Q4, we opened 69 new Supercharger locations for a total of 1,421 Supercharger stations globally".
A Tesla logo is seen at a groundbreaking ceremony of Tesla Shanghai Gigafactory in Shanghai, China January 7, 2019.