Tesla cuts prices on all models, reveals production numbers

Tesla Inc announced production numbers for last quarter, as well as a price cut on all its models.

The company said on Wednesday it had produced 61,394 Model 3s and delivered nearly 1,000 vehicles per day in the fourth quarter. The company also said it delivered a total of 245,240 vehicles, including 145,846 Model 3s and 99,394 Model S and X in 2018.

More interesting to consumers is the company's announcement regarding pricing. The Tesla Model 3, Model S and Model X base prices will all drop by $2,000. This is an effort to counteract the reduction of the federal tax credit available for Tesla vehicles. Because the company passed the 200,000-unit threshold for the full $7,500 credit, the credit has been reduced to $3,750 for six months starting this year. As such, the Model 3 drops from $46,000 to $44,000, the Model S goes to $76,000 from $78,000, and the Model X is reduced to $82,000 from $84,000. These prices are all before the $3,750 tax credit.

With Tesla dropping prices on its cars now, we're curious what will happen as the tax credit continues to fade. At the end of six months, the credit will shrink to $1,875. After that, the credit goes away completely. We wouldn't be surprised to see Tesla announce another price drop later this year, but, as with this latest cut, it probably won't make up for the entire federal tax credit.

Automakers besides Tesla want to see the tax credit's sales cap raised, and they have at least one ally in Congress, but there's also at least one lawmaker who wants to see the credit eliminated entirely.

Reporting by Reuters and Joel Stocksdale

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