Tesla Loses $4 Billion in Value on Wall Street in Single Day
Last Thursday was a tough day for Tesla CEO Elon Musk.
After Tesla Motors lost 8.3 percent, knocking roughly $4 billion off the company’s market capitalization, Musk then had to face the SEC over his tweets. It seems the SEC objected to Musk saying he violated a previous settlement with the agency over tweeting information considered illegal.
It was just last year that Musk went hands-on at his Fremont, CA plant to remodel and streamline his production of the Model 3. His efforts boosted production numbers 2018’s end. Now Tesla is falling behind on delivery of finished vehicles. Numbers released by the company late last week show that Tesla delivered just 63,000 vehicles in the first three months of 2019—down 30.5 percent from the prior quarter.
Also, the company delivered just 12,100 of its higher-margin luxury S and X models, roughly half as many as in the fourth quarter. The company attributed the decline to “challenges” associated with “a massive increase in deliveries in Europe and China.”
Total production numbers fell to 77,1000 in the first quarter of 2019, down from 86,555 in 2018’s fourth quarter, despite the company’s production ramp-up for its “affordable” compact sedan, the Model 3.
However, Tesla remains positive about 2019, saying it will deliver between 360,000 and 400,000 vehicles in 2019.
The fact that the federal tax credit that reduced the price by $7,500 to phase out helping buyers does not bode well for Tesla. The tax credit will be cut in half each of the next three years until it disappears altogether.
Aarian Marshall, writing for Wired.com, points out that Tesla reports U.S. orders for the Model 3 “significantly outpaced” what it could deliver in 2019’s first quarter. So the question becomes: Can Tesla get by on the Model 3 alone, even for a little while? In February, the company finally began to offer a $35,000 base version of the vehicle, fulfilling Musk’s dream of selling a “mass-market” electric. This month, Tesla held an unveiling event (and started taking $2,500 reservations) for the Model Y, which customers should see by fall 2020.
read more at wired.com
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