The Model 3 now starts of at $44,000
Tesla confirmed the price change in a statement. Starting today [January 1, 2019], we are reducing the price of Model S, Model X and Model 3 vehicles in the U.S. by $2,000. Customers can apply to receive the $3,750 federal tax credit for new deliveries starting on January 1, 2019, and may also be eligible for several state and local electric vehicle and utility incentives…”
As of January 1, Tesla buyers will no longer be eligible to receive the full $7,500 EV tax credit on their new cars. As the Model 3 tipped the company over a 200,000 units, the tax credit is now just $3,750. To compensate, Tesla dropped its prices across the board by $2,000 to absorb some of the difference, according to a report by Electrek.
Other models are also less expensive
To that end, a rear-wheel drive Model 3 with the mid-range battery starts of at $44,000, down from $46,000. A Model S 75D starts off at $76,000. The most expensive Model X 75D now runs from $82,000 and up.
It’s also worth noting that the $2,000 discount comes right off the top of the car’s price. Some customers may prefer that to taking a $3,750 credit when they file their taxes later on. Tesla is making the move in order to keep demand up, as incentives continue to prop up electric sales. However, despite the encouraging price drop for customers, Tesla shares dropped nearly 8 percent Wednesday morning, opening at $303.85. While Tesla delivered 90,700 vehicles in Q4 2018, that was short of Wall Street estimates, according to multiple reports. It has improved slightly throughout the morning, to around $308.
2018 was a year of trials and tribulation for Tesla, as it rolled out the Model 3 in greater numbers. There were production issues and delivery issues, but the automaker still managed to shift nearly 25,000 cars each month by the end of 2018. The tax credit played a role in that, but Tesla may be able to keep its momentum going as the tax credit phases out by improving its margins and driving higher sales. It’s worth keeping an eye on whether Tesla will manage to keep profits up through margins without needing the federal tax incentive.
Stay tuned to TFLcar.com for more updates!