Tesla posts wider-than-expected losses as US tax credit gets halved

Electric carmaker Tesla reported a wider-than-expected first-quarter loss on Wednesday after a valuable tax credit for American's purchasing its vehicles was cut in half at the beginning of the year.

Revenues grew 32% year-on-year to $4.5bn but Tesla still recorded adjusted losses of $494m, or $2.90 per share, for the quarter ended 31 March, well short of the adjusted loss of $1.15 per share and sales of $5.4bn projected on the Street.

On an unadjusted basis, Tesla lost $4.10 a share - a marked turnaround from the profit of $0.78 per share recorded during the same period a year earlier.

Tesla had previously warned that first quarter income would be "negatively impacted" as a result of "lower than expected delivery volumes and several pricing adjustments" and told investors earlier in April that it had delivered 63,000 cars during the quarter, well below analysts' consensus estimates of 76,000.

A $7,500 federal tax credit offered to buyers of its electric vehicles was halved on 1 January, softening demand in the quarter.

As of 2235 BST, Tesla shares had expanded 1.25% in after-hours trading to $261.89