Tesla cuts US car prices following record production in Q4 2018
The price cuts are aimed at counteracting reduced tax incentives in 2019.
While Tesla may have narrowly missed its goal to deliver 100,000 Model S and X vehicles in the fourth quarter of 2018, there's still some good news -- for both the carmaker and future Tesla owners -- tucked away in its production announcement.
Tesla on Wednesday released its production and delivery figures for the fourth quarter of 2018. The automaker produced 86,555 vehicles in Q4, an 8 percent increase over Q3, which was its best quarter to date. Of those vehicles produced, 61,394 were Model 3 sedans, with the rest a mix of Model S and Model X .
On the delivery front, Tesla delivered 90,700 vehicles in Q4, again a quarterly record for the company. 63,150 of those deliveries were Model 3s, which is 13 percent more deliveries than Q3, but lower than analysts had hoped, according to Bloomberg. Tesla had hoped to deliver 100,000 Model S and Model X vehicles this year, but it fell just short of that goal at 99,394 deliveries. 145,846 Model 3s made it out the door and to owners across all of 2018.
Whether increased production will beget a second quarter of profitability has yet to be seen.
What's interesting is that, in its production press release, Tesla noted that "more than three quarters of Model 3 orders in Q4 came from new customers, rather than reservation holders." With the advent of a less expensive midrange Model 3, the majority of remaining reservation holders are likely holding out for the fabled $35,000 Model 3, which does not yet exist but is planned to make its debut some time in 2019.
Tesla also announced that it will lower the prices of its vehicles to counteract reduced tax incentives being implemented in 2019. All three Tesla models will see $2,000 disappear off the window sticker starting Jan. 2. The tax incentive is still available to Tesla buyers, but it's now limited to $3,750 for vehicles delivered through June 30. That figure will again drop to $1,875 for the last half of 2019 before disappearing entirely, provided there are no legislative adjustments planned.
Tesla won't announce its fourth-quarter earnings for a couple more weeks, when we'll see if the automaker was able to eke out a profit two quarters in a row.
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