Tesla Cuts Prices on All Cars by $2000


Now, Tesla has taken things a step further, opting to slash the price of its Model 3, Model S, and Model X vehicles by $2,000 across the board.

The Model 3, Tesla's mass market auto, saw sales of more than 145,000 a year ago, the company said.

Tesla Inc. (TSLA.O) shares dropped as much as 10 per cent on Wednesday after the company reported fourth-quarter Model 3 deliveries just below estimates and said it would lower the price of its cars, prompting at least one analyst to flag the selloff as "overdone".

Also on Wednesday, General Motors said it had sold its 200,000th electric vehicle in 2018, similarly triggering a phase-out of the federal tax credit, according to a source.

Musk previously stated that Model 3 reservations had surged to over half a million, but on a recent conference call he went back on this statement saying: "To be more accurate, there have been 518,000 gross reservations for Model 3 and then we have 455,000 net reservations".

Tesla (TSLA) is cutting the prices on all of its models by $2,000 to help offset a reduction in federal tax credits for drivers who buy electric vehicles.

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Tesla's shares sank heavily in morning trading, falling over 9% when markets opened. But some bearish investors are likely interpreting it as a move to stimulate demand, said Wedbush analyst Dan Ives.

Overall, total production rose 8% to 86,555 vehicles.The company churned out 61,394 Model 3s, up from a total of 53,239 Model 3s in the third quarter.

Chief Executive Officer Elon Musk said, "Probably some deliveries in March, but April is more certain", after a Twitter user asked when the deliveries in China would begin.

Mr Hyett estimated that if Tesla continues to deliver cars at the same rate, the price cut will mean $700 million in lost revenue in 2019. 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. The vehicle has been delivered only to North American customers and in its mid to higher priced configurations.

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