Tesla announced production and delivery figures for the fourth quarter of 2018, and simultaneously announced that it would reduce the prices of all vehicles by $2,000 in order to compensate for the reduction of the federal tax credit for EV purchases.
“In Q4, we produced and delivered at the rate of nearly 1,000 vehicles per day, setting new company records for both production and deliveries,” Tesla stated. Production for the quarter consisted of 61,394 units of Model 3, “in line with our guidance and 15% more than Q3,” and 25,161 units of Models S and X, “consistent with our long-term run rate of approximately 100,000 per year.”
For the full year, Tesla delivered a total of 245,240 vehicles (145,846 Model 3 and 99,394 Models S and X). The company wasn’t shy about pointing out the historic nature of this achievement. Tesla “delivered almost as many vehicles in 2018 as we did in all prior years combined.” The year’s almost threefold increase in sales “likely represent[s] the biggest single-year growth in the history of the automotive industry.” What’s more, “2018 was the first time in decades that an American car – the Model 3 – was the best-selling premium vehicle in the U.S. for the full year, with U.S. sales of Model 3 roughly double those of the runner up.”
Wall Street was not so impressed. Although the quarter’s production was in line with Tesla’s guidance, some analysts had been expecting more, so the financial press described the numbers as “a miss” and “disappointing.” Furthermore, suspicious minds saw the unexpected price reduction as a possible signal of flagging demand. On the first trading day of 2019, TSLA stock dropped sharply at the open, and remains down about 6% at this writing.
“Our Q4 Model 3 deliveries were limited to mid- and higher-priced variants, cash/loan transactions, and North American customers only,” says Tesla. “More than three quarters of Model 3 orders in Q4 came from new customers, rather than reservation holders. There remain significant opportunities to continue to grow Model 3 sales by expanding to international markets, introducing lower-priced variants and offering leasing. International deliveries in Europe and China will start in February 2019. Expansion of Model 3 sales to other markets, including with a right-hand drive variant, will occur later in 2019.”