Tesla disappointed investors Tuesday, saying it delivered less vehicles than expected during the fourth quarter despite efforts to ramp up production. Its shares fell by about 5 percent in premarket trading.
Tesla previously gave investors hope that its production rates would improve, saying that the number of labor hours to build the Model 3 fell by more than 30 percent from the second to the third quarter. The company also told investors in late October that it took less time to build than the Model S sedan and Model X sport utility vehicle — another first for the company.
“We will focus even further on cost improvements while continuing to increase our production rate” during the fourth quarter, the company said at the time.
CEO Elon Musk announced Oct. 23 that the company planned to limit certain options on its higher-end Model S sedans and Model X SUVs to streamline production. The company also announced plans during the fourth quarter to start selling a $45,000 version of the Model 3, before raising the price $46,000. It has yet to produce the base Model 3, which it has promised for a price of $35,000 before incentives.
The fourth quarter marked an end to a $7,500 federal tax credit that Tesla was able to use to lure buyers in the past. That was cut in half to $3,750 starting Jan. 1.