The company's deliveries for the full year matched Wall Street estimates, but its figures for the fourth quarter fell short.
The electric vehicle maker said it would cut the price on its cars by US$2,000, to help make up for USA buyers now being eligible for only a US$3,750 federal tax credit for the next six months, half of what they previously received. "We also believe the $2,000 price cut to help subsidize the lower EV tax credit is a move that was not fully expected". Worldwide deliveries in Europe and China will start in February 2019.
Tesla delivered 63,150 Model 3s in its fourth quarter, falling short of FactSet estimates of 64,900.
It built 86,555 vehicles in the fourth quarter, including 61,394 of its flagship Model 3 sedans.
Tesla reported that 75 percent of the 61,394 Model 3s it delivered during the quarter went to new customers rather than reservation holders, which suggests numerous latter are still holding out for the $35,000 vehicle.
Previous year was a turbulent one for Tesla, with Mr Musk fined and forced out as chairman by the United States financial regulator after he tweeted that he had secured funding to take private the company at $US420 a share. For the first nine months of 2018, the company suffered a third-quarter loss per vehicle delivered of $8,019.
"This was a good quarter in terms of production ramp and strong underlying demand, but Tesla came up shy of bull expectations and this will be the focus of the street", Daniel Ives, an analyst at Wedbush Securities, said in an email to Bloomberg.
Pre-market trading saw Tesla shares tumble more than 8 percent on Wednesday.
Shares of electric auto and solar panel maker Tesla Inc. tumbled Wednesday morning after the company cut vehicle prices by $2,000 and announced fourth-quarter sales figures that fell short of Wall Street estimates.
In Q4, we produced and delivered at the rate of almost 1,000 vehicles per day, setting new company records for both production and deliveries.
China is the largest market for electric vehicles and most forecasters predict that its sales in the country will speed up rapidly as government regulation drives toward a goal of 100-percent electric vehicles by 2030. Starting today, we are reducing the price of Model S, Model X and Model 3 vehicles in the U.S.by $2,000.