Shares in electric car maker Tesla have fallen after it revealed that it was cutting prices for vehicles in the US while its quarterly production figures missed expectations.
The company, led by Elon Musk, reported that it was churning out nearly 1,000 cars a day, setting new records – but the figure fell short of Wall Street targets.
Tesla also said it was to cut the price of Model S, Model X and Model 3 vehicles in the US by $2,000 to offset a reduction in the tax breaks available to buyers of electric vehicles.
The update sent the shares 7% lower by the close of trading in New York.
That was despite Tesla highlighting its rapid growth by boasting that its 245,000 deliveries over the course of 2018 were almost as many as it achieved in all previous years combined.
Its rate of production by the end of the year was almost three times as high as at the beginning.
Tesla said that its achievements last year “likely represent the biggest single-year growth in the history of the automotive industry”.
The company has been under intense pressure to deliver on Mr Musk’s promise of stabilising production, seen as crucial to it easing a cash squeeze and achieving long-term profitability.
It has also had to react to the phase-out of US tax credits for electric vehicles – which fell from $7,500 to $3,750 on 1 January and will gradually be phased out this year.
That has prompted it to cut prices in order partially to alleviate the hit to customers.
Nicholas Hyett, equity analyst at Hargreaves Lansdown stockbrokers, said: “For most automotive groups these would be very impressive numbers – almost tripling the number of vehicles you deliver in just one year is no mean feat, and Musk and his team deserve a huge amount of credit.
“But unfortunately for Tesla shareholders, the market has come to expect Herculean achievements, and sometimes that means the bar is just that little bit too high.
“Deliveries have fallen short of what some analysts had expected and the shares are suffering as a result.
“Longer term we think the price cut is more concerning – it suggests Tesla customers are perhaps a bit more price sensitive than you might have thought.”
The price cuts could mean hundreds of millions of dollars in lost revenues for 2019, Mr Hyett said.
In November, Mr Musk admitted that Tesla had been within weeks of going bust earlier in the year as it poured cash into ramping up car production.
During 2018, the billionaire also ran into trouble with US financial regulators over tweets that suggested he might take the company private.
Tesla and Mr Musk were fined $20m each over the “false and misleading” tweets by the Securities and Exchange Commission and the controversy prompted the company’s boss to step down as chairman – though he remains chief executive.