DETROIT (AP) — Shares of electric car and solar panel maker Tesla Inc. tumbled Wednesday after the company cut vehicle prices by $2,000 and announced fourth-quarter sales figures that fell short of Wall Street estimates.
The company said in a statement before the markets opened that it delivered over 245,000 electric cars and SUVs last year, nearly as many as all previous years combined.
But Tesla also said it would cut prices of its three models by $2,000 to help customers handle the gradual phase-out of federal electric vehicle tax credits. On Jan. 1 the federal credit for Tesla buyers dropped from $7,500 to $3,750. It will gradually be phased out this year.
Tesla said it delivered 90,700 vehicles from October through December. Analysts polled by data provider FactSet expected 92,000. Tesla said fourth-quarter deliveries were 8 percent higher than its previous quarterly peak in the third quarter of 2018.
Tesla shares fell 7.2 percent in midday trading to $308.94. In the past year they have traded from a low of $244.59 to a high of $387.46.
The company now is moving into an important phase of its business and will have to decide whether to cut production to match what appears to be waning demand, or discount its vehicles to stimulate sales like other automakers do, Gartner analyst Michael Ramsey said.