Published: Wed, January 02, 2019
Business | By Eloise Houston

Tesla Cuts Prices on All Cars by $2000

Tesla Cuts Prices on All Cars by $2000

Elon Musk's auto company delivered a total of 90,700 vehicles in the fourth quarter, up from 29,870 a year earlier. Wall Street analysts had forecast 92,000 total deliveries - 64,900 for the Model 3, 14,200 for the Model S and 13,600 for the Model X, according to average estimates analysts compiled by FactSet.

Tesla has been urging buyers to make use of the federal tax credit, with Musk reminding them on Twitter on Saturday that the benefit would drop to half at the beginning of 2019.

The Palo Alto, California, company's 2018 sales included nearly 146,000 Model 3 lower-priced cars and another 99,000 of the more expensive Model S sedan and Model X SUV.

Apart from reporting record deliveries and production, Tesla also noted that it is rolling out a price adjustment of $2,000 for its vehicle lineup to absorb the reduction of the federal tax credit being granted to electric auto buyers.

The company said in its third quarter results that it would focus in the fourth quarter on further increasing its production rate and there were indications that Wall Street had been expecting higher numbers.

Tesla shares fell as much as 9.7% to $300.52 as of 9:36 am on Wednesday in NY.

The move follows a wave of price cuts (and jumps) as Tesla trimmed option packages, colors, and equipment to increase production.

Tesla shares have fallen after the electric carmaker revealed that it missed expectations for deliveries and will be cutting its vehicle prices by $2,000 in the US. The deliveries are below our estimates and the consensus estimates.

The Model 3 now starts at $45,200 with destination for the Mid Range version; it is the cheapest new Tesla currently for sale (the long-promised $35,000 Standard Range version is now said to be four to six months away). The company also told investors in late October that it took less time to build than the Model S sedan and Model X sport utility vehicle - another first for the company. In all, Tesla delivered 245,240 vehicles, which means the automaker is now in close company with any number of strong-selling established brands.

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