Shares of Tesla fell by more than 8 percent during the first trading day of 2019 after the electric-car company said it delivered fewer vehicles than Wall Street expected. The missed expectation is especially noteworthy because the fourth quarter of 2018 was the last period during which customers could earn a major federal tax credit for buying an electric vehicle, which would have boosted sales. In a news release, Tesla said it would cut the price of its Model 3, Model X and Model S vehicles beginning Wednesday to partially cover the reduction of the federal tax credit for electric vehicles. The full $7,500 tax credit for Tesla customers was cut in half to $3,750 at the start of the new year. The company said the remaining tax credits combined with not having to fuel up at the gas pump and lowered maintenance costs "means our vehicles are even more affordable than similarly priced gasoline vehicles."
Tesla shares fell 9 percent on Wednesday after the electric car maker delivered fewer-than-expected Model 3 sedans in the fourth quarter and cut prices for all its vehicles in the United States to offset a reduction in a green tax credit. Tesla had over 3,000 Model 3s left in inventory in the United States as of Sunday, automotive news website Electrek reported on Monday, citing people familiar with the matter. Chief Executive Elon Musk is under intense pressure to deliver on his promise of stabilizing production for the company's mass market sedans, seen crucial to it easing a cash crunch and achieving long-term profitability. Tesla shares fell after the electric car maker delivered fewer-than-expected Model 3 sedans in the fourth quarter and cut prices for all its vehicles in the US. Under a major tax overhaul passed by the Republican-controlled U.S. Congress late last year, tax credits that lower the cost of electric vehicles are available only for the first 200,000 such vehicles sold by an automaker.
Tesla has lowered the purchase price of its Model Y by $3,000, so its Long Range AWD will now cost $49,990, Electrek reported. The Model Y just began shipping in March, and earlier this month Tesla reported better-than-expected delivery numbers for all its vehicles in the second quarter, so the reason for the price cut isn't totally clear. But it's likely to help boost sales at a time when all carmakers are feeling the pinch of the economic downturn. Tesla cut prices on several vehicles in May, but the Model Y was not included in those reductions. It lowered the prices on the base models and Performance versions of the Model S and Model X by $5,000, and cut the prices on all versions of its Model 3 by $2,000 (with prices slightly different for Model 3s sold in China).
In recent months, Tesla skeptics have argued that the company's growth had stalled. After delivering a record-breaking 83,500 vehicles in the third quarter of 2018, the company's deliveries grew only modestly in the next few quarters: 97,000 in the third quarter of 2019, for example, and 90,650 in the second quarter of 2020. This story originally appeared on Ars Technica, a trusted source for technology news, tech policy analysis, reviews, and more. Ars is owned by WIRED's parent company, Condé Nast. But Tesla's Q3 2020 numbers, released Friday morning, put those concerns to rest.
A link has been posted to your Facebook feed. Tesla is cutting the starting price of its U.S. electric vehicles by $2,000 and bolstering other incentives as it continues to expand production. The price cut comes after the $7,500 federal tax credit for electric vehicles was slashed in half at the end of 2018. Concerned investors drove Tesla shares down more than 10 percent in early trading Wednesday morning to $299.10. The price cut reflects Tesla's bid to gain greater market share of the automotive market.