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Tesla stock drops 10 percent after shortfall in deliveries
APRIL 4, 2019 / 8:46 AM / CBS/AP
Tesla's stock declined 10 percent in pre-market trading on Thursday, after reporting that deliveries slumped 31 percent from a year earlier. On top of that, its assembly lines slowed during a rocky start to the new year, issues that are likely to magnify nagging doubts about the company's ability to post sustained profits.
The company said it delivered 63,000 vehicles in the first quarter, almost one-third less than in early 2018.
The Palo Alto, California, company produced 77,100 vehicles from January to March, well behind the pace it must sustain to fulfill CEO Elon Musk's pledge to manufacture 500,000 cars annually. It cited a big increase in vehicle deliveries to Europe and China and "many challenges encountered for the first time." Deliveries may be as low as 360,000 this year, the company said.
The lower-than-expected delivery numbers and "pricing adjustments" will take a bite out of Tesla's first-quarter net income, it said. But it said it ended the quarter with sufficient cash on hand.
Tesla said it expects to deliver between 360,000 and 400,000 vehicles this year.
Musk has acknowledged that Tesla's hopes of becoming a consistent moneymaker are riding on the success of the Model 3 and a sport utility vehicle called the Model Y scheduled to be released next year. And for those vehicles to become hits, Tesla will have to be able to produce them in high volumes.
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APRIL 4, 2019 / 8:46 AM / CBS/AP
Tesla's stock declined 10 percent in pre-market trading on Thursday, after reporting that deliveries slumped 31 percent from a year earlier. On top of that, its assembly lines slowed during a rocky start to the new year, issues that are likely to magnify nagging doubts about the company's ability to post sustained profits.
The company said it delivered 63,000 vehicles in the first quarter, almost one-third less than in early 2018.
The Palo Alto, California, company produced 77,100 vehicles from January to March, well behind the pace it must sustain to fulfill CEO Elon Musk's pledge to manufacture 500,000 cars annually. It cited a big increase in vehicle deliveries to Europe and China and "many challenges encountered for the first time." Deliveries may be as low as 360,000 this year, the company said.
The lower-than-expected delivery numbers and "pricing adjustments" will take a bite out of Tesla's first-quarter net income, it said. But it said it ended the quarter with sufficient cash on hand.
Tesla said it expects to deliver between 360,000 and 400,000 vehicles this year.
Musk has acknowledged that Tesla's hopes of becoming a consistent moneymaker are riding on the success of the Model 3 and a sport utility vehicle called the Model Y scheduled to be released next year. And for those vehicles to become hits, Tesla will have to be able to produce them in high volumes.
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