Tesla Hikes Sales, Cuts Prices

Tesla Inc. reports it delivered a record 90,700 electric cars in October-December, 70% of them its relatively low-priced Model 3 sedans.

The company says it built and delivered cars during the quarter at a rate of nearly 1,000 vehicles per day. Deliveries for the full year totaled 245,200 units, nearly equal to the company’s combined output for the previous five years.

Tesla also has lowered its U.S. retail prices on all models—the Model S and Model 3 sedans and Model X crossover vehicle—by $2,000, effective today.

The company says the reduction is to partially offset a drop in the available federal tax credit for buyers of the company’s EVs. But the news triggered a 9% drop in Tesla’s stock price this morning by investors who worry that the price cut signals that the carmaker’s order backlog may be more price sensitive than expected.

The former $7,500 credit for Tesla cars fell to $3,750 this month because the carmaker’s cumulative sales surpassed 200,000 units late last year.