By on January 2, 2019

The calendar reads 2019, meaning new Tesla customers can’t hope to wrangle more than $3,750 in EV tax credits from the feds — a figure that’s half as much as the incentive enjoyed by buyers up until New Year’s Eve. Of course, you may find yourself living in a state that’s happy to hand out some of its own cash. If so, lucky you.

Looking to soak up some of the difference, Tesla announced a price cut on all models Wednesday. Going forward, or at least until CEO Elon Musk decides otherwise, Tesla is shaving $2,000 from sticker prices across the board — including on the current cheapest model, which recently saw a price bump.

Getting into a Mid Range Model 3 now carries a cost of $44,000 before federal incentives, which brings it sooo close to dropping below the $40k threshold.

You’ll recall that Tesla introduced the rear-drive model with a $45,000 asking price last October, undercutting the price of the Long Range model by $4,000 (by having it travel 50 fewer miles on a charge). Shortly after its introduction, Tesla hiked the Mid Range’s price by a grand.

That price change coincided with the elimination of the rear-drive Long Range model (then priced at $49,000), making the dual-motor, all-wheel drive version the next rung up on the Model 3 ladder. Depending, seemingly, on the time of day, that car’s price stood at $54,000 or $55,000. Not anymore — it’s now $51,000. The dual-motor Performance model will set you back $62,000 before incentives.

As for the company’s Model S and X line, well, it’s more of the same, though their lofty prices water down the significance of manufacturer or government incentives.

Wednesday wasn’t all about price changes, however. In a filing to the U.S. Securities and Exchange Commission — a body Musk openly loathes — Tesla announced fourth-quarter production figures of 86,555 vehicles, making it the busiest quarter for the automaker to date (an 8 percent increase over Q3). It was also less than what analysts predicted. This, plus the price cuts, sent Tesla shares tumbling in Wednesday trading.

Of the Q4 tally, 61,394 vehicles were Model 3 variants, which works out to an average production rate of just over 4,700 vehicles per week. Model 3 deliveries were up 13 percent over the previous quarter. Still, as CNBC reports, Wall Street predicted nearly 65,000 Model 3 deliveries.

While Tesla’s Q4 figures reveal steady improvement, it’s hard not to think back on the hype-building production promises issued by Musk over the past couple of years. Half a million cars built in 2018? That was a promise, once upon a time, but reality shows just 245,240 vehicles delivered last year. 10,000 Model 3s per week by the end of 2018? That was another.

Meanwhile, the $35,000 base Model 3 promised in 2016 remains out of reach, though production is said to begin in the first half of this year.

“There remain significant opportunities to continue to grow Model 3 sales by expanding to international markets, introducing lower-priced variants and offering leasing,” the company stated in its filing. “International deliveries in Europe and China will start in February 2019. Expansion of Model 3 sales to other markets, including with a right-hand drive variant, will occur later in 2019.”

[Image: Tesla]

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44 Comments on “Tesla Greets New Year With Price Cuts, Lower-than-expected Q4 Deliveries...”


  • avatar
    Art Vandelay

    Cash on the hood comes to Tesla.

    • 0 avatar
      jmo2

      It’s not cash on the hoods. It’s a price cut.

      I know it works but it drives me crazy when companies jack up prices and they offer discounts so buyers feel like they got a deal. Cutting prices is the honest way to do it.

      • 0 avatar

        It’s human nature, sadly.

        A certain percentage of the population looks for the lowest honest price; all the rest look for the cash on the hood or its equivalent.

        Perceived value often trumps actual value.

        • 0 avatar
          1500cc

          @Budda

          It’s partially that, but incentives are also a far more flexible way to adjust prices as market conditions demand. OEMs can change their effective prices dozens of times a year via incentives to get the desired result, but it would be cumbersome to change the actual MSRP more than a few times.

      • 0 avatar
        Scoutdude

        Cutting prices is not the way to do it. Cash on the hood is usually for a limited time and it does work to temporarily boost sales because the average buyer sees it as a deal and will be pushed into action because they know it is ending next week.

        Cut the price and now there will be cries if they try and raise the price back up.

  • avatar
    1500cc

    @Budda

    It’s partially that, but incentives are also a far more flexible way to adjust prices as market conditions demand. OEMs can change their effective prices dozens of times a year via incentives to get the desired result, but it would be cumbersome to change the actual MSRP more than a few times.

  • avatar
    stingray65

    It seems you can order a model 3 for immediate delivery, which together with the price cut suggests softening demand – they better hope the Norwegians love these things.

    • 0 avatar
      Scoutdude

      Yeah Tesla threw out build to order on the Model 3 some time ago and has been building cars faster than the orders were coming in.

    • 0 avatar
      tylanner

      That’s what the Tesla Model 4,5,6,7,8,9,10 are for…see iPhone.

    • 0 avatar
      SCE to AUX

      Tesla has stated that over 75% of sales in Q4 was non-reservation holders. That doesn’t sound like softening demand.

      • 0 avatar
        Master Baiter

        “Tesla has stated that over 75% of sales in Q4 was non-reservation holders. That doesn’t sound like softening demand.”

        That tells me that reservation holders want the $35K version, but Tesla chose to build the $50K versions instead, for obvious reasons. So demand is strong at $35K, but softening at $50K.

  • avatar
    Scoutdude

    Not a big surprise, everyone knew that the loss of $3750 cash on the hood was going to cut into their sales significantly, though I did expect them to do it immediately.

  • avatar
    Asdf

    Considering the fact that the Tesla Model 3 is defective, with its charging time taking WAY LONGER than the reasonable five minutes it should be expected to take, a mere $2,000 price cut is not good enough. No, what we should reasonably expect is for Tesla to immediately halt the delivery of ALL its models, recall ALL vehicles currently delivered to the marketplace and fix the charging defect before returning the cars to their owners. If Tesla is so incompetent it’s unable to fix the problem (which would be strange, as it would suggest that Tesla is not viable and has no business making cars), Tesla must be forced to give all buyers their money back, and the sale of new Tesla vehicles needs to be banned by the authorities as well until the problem is fixed.

    (And all the pesky Elon-bots frequenting this site really needs to stop complaining whenever I post, because *I* am the one being perfectly reasonable here, whereas they are not, so please feel free to STFU.)

    • 0 avatar
      Whatnext

      You’re not being reasonable, you’re acting ridiculous. Your blathering only makes you appear childish. It’s a shame TTAC doesn’t have an Ignore function as your schtick has got old.

    • 0 avatar
      sirwired

      I can’t tell if you think you are being funny every time you post this in response to every single Tesla article or what. Because it’s certainly neither insightful nor funny (if for no other reason than being insanely repetitive, since you’ve posted it so much.)

      (And no, I’m definitely not a Tesla fanboy; I rarely believe a single damn thing His Muskiness says, and I have no desire to own one.)

      • 0 avatar
        Asdf

        There’s nothing funny about Elon Musk’s serial incompetence, it’s just tragic, so of course I’m not trying to be funny.

        Musk’s factory tent should be re-purposed into a circus tent, perhaps that would generate at least a tiny bit of fun. His cars certainly are no fun.

    • 0 avatar
      mcs

      The other day, I was charging my phone and car at the same time, and the car was going to take about 20 minutes, but the phone was estimating something longer. So…

      “Considering the fact that the cell phones are defective, with their charging time taking WAY LONGER than the reasonable five minutes it should be expected to take, a mere price cut is not good enough. No, what we should reasonably expect is for cell phone manufacturers to immediately halt the delivery of ALL their models, recall ALL phones currently delivered to the marketplace and fix the charging defect before returning the phones to their owners. If phone manufacturers are so incompetent they are unable to fix the problem (which would be strange, as it would suggest that cell phone manufacturers are not viable and no business making phones), Phone manufacturers must be forced to give all buyers their money back, and the sale of new cell phones need to be banned by the authorities as well until the problem is fixed.”

      Yeah, it’s getting ridiculous.

      • 0 avatar
        ToddAtlasF1

        If you had a gasoline car, you could be driving while your cellphone is charging without materially affecting your range.

        • 0 avatar
          mcs

          Yeah, but the gasoline cars were safe and sound in the garage waiting for a nice day while the EV was risking its life in heavy traffic.

          Actually, the phone doesn’t really have an impact on the car’s range. At the time I noticed the difference, the car was sucking down power at a 50kW rate while the phone was at a feeble 5w. It’s much more of a pain keeping charged than the car. Anyway, I was just satirizing his schtick.

      • 0 avatar
        Asdf

        You don’t have a knack for satire, comparing apples and oranges, and with your feeble attempt falling flat on it face as usual. Ridiculous Elon-bot.

        • 0 avatar
          mcs

          @asdf: I have actual experience with EVs. You apparently do not. I’m just stating facts while you just troll with a nonsensical faux-standard. I’m telling you like it is. Today I ran an errand in the EV. I unplugged, did my thing, then plugged in when I got home. Never looked at my range gauge and didn’t need to. How long will it take for it to go to 100%? I don’t know and I don’t care.

          Yesterday I made a long trip in cold temps and decided to top up a bit before getting home. I was there only 6 minutes according to the charging records. Got my extra range padding and continued on my way. Plugged it in when I got home and sometime in the night, it finished charging. How long it took doesn’t matter.

          That’s my own personal experience. Charging time for me really doesn’t matter. In fact, for my next EVs, I’m going to get enough range so that I’ll probably never need public/non-overnight charging again. It’s easy, I’m just buying cars with a range greater than what I’ve driven in a single day since maybe 2008.

          I usually fly long distances. The 100-mile range car has been dependent on public charging on occasion, but that won’t be the case of my new cars.

          Again, that’s just my own personal experience of 75k miles of EV driving. Other people have different situations. I realize that. I’m only reporting my own situation and experience. In my situation, charging time, for the most part, is irrelevant.

          You seem to advocate some sort of repressive government action that dictates what is acceptable charge time for an EV. You seem to love an intrusive big government that dictates how people live. Here in the US, we are free to decide what works for us and if we don’t care about charge times, we have the freedom to buy what we want whether you like it or not.

          Sure, charge times are definitely an issue for some people. It is what it is. If it’s a problem for them, then they shouldn’t buy an EV and a government should not force them into a situation that doesn’t work for them.

    • 0 avatar
      Vulpine

      No BEV… none of them… can charge in what you call, “the reasonable five minutes it should be expected to take.” Moreover, that five minutes is a totally UN-reasonable time considering the fact that you’re charging a battery.

      Besides; if you plug it in at home, it really doesn’t matter how long it takes; you would have a full charge in the next morning anyway.

      • 0 avatar
        Asdf

        Just because we’re talking about a battery and not a fuel tank doesn’t mean it’s unreasonable to expect a charging time of five minutes, as BEVs compete with ICE-powered cars and have to be competitive on such basic things in order to survive in the marketplace. If BEV automakers aren’t even capable of implementing such a basic and trivial feature, that means that BEVs are a technological dead end, thus they should be withdrawn from the marketplace.

        Unfortunately there had to be someone even in this thread demonstrating that BEV ownership makes people retarded, because here we go again: “if you plug it in at home, it really doesn’t matter how long it takes; you would have a full charge in the next morning anyway”. Yet charging the BEV at night does NOTHING to reduce the charging time, and is therefore COMPLETELY IRRELEVANT. There’s no reason for anyone to mention it at all (though it’s probably a standard Elon-bot phrase), as it’s just like saying that it doesn’t matter that the windscreen wipers don’t work, because the car is perfectly usable whenever it’s not raining, even though the non-working wipers is still a basic defect of the vehicle, just like the extremely long charging time of the BEV.

        • 0 avatar
          indi500fan

          One of their big problems is that high travel weekends (Thanksgiving, Christmas, etc) cause backups at the electric filling stations and also reduce the charge rate when the stalls are full (which compounds the backup). Per Tweater it seems that not everybody enjoys partying with their Tesla buds for a couple hours in the Supercharger queue.

        • 0 avatar
          Vulpine

          @Asdf: Anybody with any understanding of electricity and electronics knows that it is effectively impossible to plug in and store any significant amount of energy in a short time. Moreover, they know that the 70% rule pretty much controls the charging rate of any rechargeable device, whether it be a battery, a capacitor or an inductor.

          Such devices will act like a near- dead short when first connected, unless a current control is in circuit. Without that current control, the wires themselves would overheat to the point of melting off the insulation and ultimately melt the wires themselves; so the charging rate has to be controlled from the outset. This, then, affects the overall charge a battery can take and still hold together.

          Ok, so we’re already looking at chargers capable of 50kWh, 100+kWh and now one claiming over 250 kWh. Most BEVs today cannot charge at even the 50kWh rate… which at 400Volts would be 125 Amps. Doesn’t sound like much, does it? Your dryer outlet is typically rated to 50Amps, so that suggests a 4.5-hour charging time at 220V. This is an average charging rate though…it would start at whatever the circuit was capable of handling and then slow down as the battery charges. At that low voltage and current, it would charge at the supply’s rate for about 3 hours (70%) of that time, then start slowing as the charge approaches full. The real numbers are somewhat different as this is only a rough example.

          Now, assuming we hook up to a Supercharger at 400V puts us back at 125 Amps which would mean a ‘top-off’ charging time of roughly 90 minutes…fully half of which is effectively wasted time as you would only receive about 10% of your total charge in that last half-hour. You would get 70% of your full charge in the first half-hour and 70% of the remaining in the second half-hour. If we assume a 100kWh battery pack, that means you’d be at about 91% of your full charge in one hour.

          Now, I know Porsche/BMW are claiming a much faster charger, basing on 800V and supposedly 150Amps or higher. But their own marketing for this new device claims, “100km of range in 15 minutes.” That’s 60 miles, guys. And if we assume (and we shouldn’t) 400Watts per mile, That’s only 6.7 miles per minute charging rate to start AND no real improvement over the Tesla Supercharger. A 100kWh battery pack would still take nearly an hour to come to a nominal (but not actual) full charge. But then, the Porsche isn’t claiming a 100kWh battery pack, either. They’re claiming only a bit over 200 miles of effective range which suggests somewhere around 70kWh in the battery.

          As for your relevancy of charging at home vs charging at a station; there’s a huge difference between spending 90 seconds to plug/un-plug your car vs standing out in the cold and wet (or hot and humid) outdoor air while that gas tank fills. That INCLUDES even if you’re on a trip. Wouldn’t you rather be inside the station all nice and warm and maybe even getting a snack (or full dinner) rather than standing out in that horrid weather all that time?

          Look; I know you’re prejudiced against BEVs. Heck, for all I know you’re one of those people ICEing Tesla Superchargers with your full-sized pickup truck. But you obviously don’t understand the differences and the benefits of electric over mechanical drive. Fuel price is roughly 50% that of gasoline for your truck (about 33% of diesel, if you flow that way) and it’s almost perfectly silent… barring only the whine of the tires on the road. And as they become more popular, they’ll also be cheaper to operate and maintain than your truck, too.

          • 0 avatar
            conundrum

            “Anyone with an understanding of electricity …”

            What, like you? You don’t seem to have any clue about the difference between power and energy.

            The kWh is a measure of energy or work. So a 50 kWh charger is impossible. You mean 50 kW, the kw being a measure of power, like horsepower. That is how chargers are rated.

            Later on you talk about 400 watts per mile, which is like saying .53 hp per mile. You mean 400 Wh.

            If I need to be lectured to by someone claiming to know what they’re talking about, getting power and energy units backwards is NOT the place to start.

            Here’s a hint: power times time is energy, hence kW.h is energy, but kW is a measure of power.

            Having spent a quarter century in the electric utility business and knowing of what I speak (and after attending university to become an injuneer), I remember 11th Grade science taught us what I am trying to teach you.

            You do not seem to have an innate understanding of the measurements involved if you can’t grasp the difference between kW and kWh. I am thus, with glazed eyes, quite unable to read your lecture in further depth.

          • 0 avatar
            Vulpine

            @conundrum: Personally, I don’t give a damn. Obviously you understood me enough to read it correctly, even if I got the Wh and kW crossed up. You got my point and that was all I was after.

            Oh, and I taught this stuff 40 years ago. I have a right to be a little forgetful as to which goes where at times.

  • avatar
    vvk

    Buy the dip! Good news all around.

    Tesla raised prices a little while ago, so the “cut” nets to same or similar pricing. And still no discounts, rebates, leasing or advertisement of any kind.

    Our America-loathing author makes it seem like all gloom and doom. But in reality America rules!

  • avatar
    indi500fan

    I think Tesla has proved there were a lot of peeps who would buy a Model 3 at $25k (after the fed + state credits) but fewer at 50k. The price/demand curve is real. The early 80s GM-level QRD combined with month long waits for parts and service appts isn’t helping either.

  • avatar
    SCE to AUX

    It’s entertaining to read the scary headlines from TTAC and the predictive comments by the haters around here:

    https://www.thetruthaboutcars.com/2017/12/hedge-fund-manager-convinced-tesla-shares-will-collapse-soon/

    At the time (~ December 13, 2017), TSLA was around $310. Today, it closed at… $310. TSLA stock is a wild ride, but as usual TTAC only reports the drops. With all the drops TTAC has reported, TSLA should be around $10.

    Tesla now owns 80%+ of the North American EV market, and they will likely be the ~#12 or #13 brand in the US in 2019. Go ask Jim Hackett if he’d like to have Tesla’s problems: rising market share, the best brand equity in the business, and unbridled demand.

  • avatar
    EBFlex

    Musk is such a fraud.

    He should be in jail

  • avatar

    If you need to spend time doing something silly, go to Twitter and search #SGF and #SAF. You will fall into the tweets of the shorts…..who do things like count cars on lots and amplify every negative Tesla experience into gospel. I’ve very entertained (popcorn emoji here) but wouldn’t buy a Tesla due to the legit spare parts issues and the scary way some of the cast alum suspension members snap. I think EV has a place and if I didn’t do 400 mile days for work a few times a year I’d consider one. Again, these Twitter feeds are done with a clear financial goal, but they are still entertaining-not facts. Counting cars is pretty much meaningless…a lot of what they do would make zero sense and result in no real info applied to, say, GM or Toyota.

  • avatar
    incautious

    But but but there’s 420,000 reservations, no need to cut prices.

    • 0 avatar
      Vulpine

      How ’bout I blow a raspberry your way? Clearly, and as stated by Tesla, the price cut is to partially accommodate the drop in the tax benefit. It makes sense.

    • 0 avatar
      Giskard

      You are aware that their reservation count includes people waiting for the short range version and those in countries that aren’t the USA or Canada? None of these have gotten their car yet.

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