Tesla said fourth-quarter deliveries were 8 per cent higher than its previous quarterly peak in the third quarter of 2018.
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's sales included nearly 146,000 Model 3 lower-priced cars and another 99,000 examples of the more expensive Model S and Model X. The Model 3 starts at US$35,000 but still can't be purchased for under US$45,000. The losses continued following the opening bell, and as of 9:52 am ET shares were trading at $302.12 - down 9.16 percent from Monday's close at $332.80. 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. Tesla delivered 13,500 Model Ss and 14,050 Model Xs in the fourth quarter, raising the total for the year to 99,394 compared with about 100,000 in 2017.
Tesla more than tripled deliveries of its electric cars in the last three months of the year but the news was not enough for Wall Street which sent the company's shares into a tailspin following news that sales of its first mass market vehicle were less than expected.
While Tesla reported yet another historic quarter that saw the company delivering an average of 1,000 vehicles per day, Wall Street has not taken kindly to the electric auto maker's Q4 2018 results.
"The price cut is what's driving the stock lower, as it openly acknowledges the sunset of subsidy dollars is a material headwind", he said.
Tesla (TSLA) disappointed investors Wednesday, announcing that it delivered 90,700 vehicles during the fourth quarter - short of Wall Street forecasts despite its efforts to ramp up production.
Ahead of the price cut announcement, chief executive Elon Musk urged Tesla customers to make use of federal tax credits. "I don't expect that Tesla operates in the black in 2019", Frank Schwope, an analyst with NORD/LB said.
Tesla delivered 63,150 Model 3s in the quarter, falling short of FactSet estimates of 64,900.