Tesla Cuts Prices on All Cars by $2000

Marcus Newton
January 3, 2019

"We also believe the $2,000 price cut to help subsidize the lower EV tax credit is a move that was not fully expected".

Elon Musk's auto company delivered a total of 90,700 vehicles in the fourth quarter, up from 29,870 a year earlier.

The $7,500 federal tax credit for electric cars was cut in half as of Tuesday.

"Combined with the reduced costs of maintenance and of charging a Tesla versus paying for gas at the pump - which can result in up to $100 per month or more in savings - this means our vehicles are even more affordable than similarly priced gasoline vehicles", Tesla said. Come 2020, the tax credit disappears entirely (although no one will care since two-thirds of the world's wild animals are on track to disappear by 2020, too).

But the price cut of $2,000 on the model took the market by surprise and weighed on the stock, pushing it down 9.4% in morning trade on a broadly weaker day for United States markets.

Starting Wednesday, the company said it will be reducing the price of Model S, Model X and Model 3 vehicles in the U.S.by $2,000.

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Tesla has cut base prices on all nine variants of its Model 3 and Model S sedans and its Model X crossover by $2000 as the automaker adapts to a mandatory phaseout of the federal tax credit.

Chief executive Elon Musk is under intense pressure to deliver on his promise of stabilising production for the Model 3, which is seen crucial for easing a cash crunch and achieving long-term profitability.

In the fourth quarter, Tesla delivered 63,150 Model 3s, 13,500 Model S sedans and 14,050 Model X SUVs.

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. But some bearish investors are likely interpreting it as a move to stimulate demand, said Wedbush analyst Dan Ives. The company said it would begin delivering Model 3s to Europe and China in February. This is despite the electric auto maker only producing mid and high-priced variants for the Model 3, and deliveries only being exclusive to North America.

"There remain significant opportunities to continue to grow Model 3 sales by expanding to global markets, introducing lower-priced variants and offering leasing", Tesla said.

Other reports by MaliBehiribAe

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