Monday was a tough day for the US stock market, but Tesla shares were hit especially hard. The stock fell 7.6 percent after Tesla cut the price of the Model 3 in China and CEO Elon Musk promised to refund US customers if they miss a tax credit deadline due to delays in the shipment of Model 3.
Reuters reported this weekend that prices for the Model 3 on Tesla’s website in China had dropped by as much as 7.6 percent, with a starting price of RMB 499,000 (about $ 72,000). This is the third time since November that Tesla It has lowered the price of its vehicles in China.
The first was in November, when it cut the price of Model X and Model S vehicles by 12 to 26 percent, stating that it was “absorbing a significant portion of the fee to help make the cars more affordable for customers in China”. Monthly, Tesla again slashed the Model X and Model S prices, citing China’s decision to temporarily suspend a new 25 percent tariff on U.S.-produced vehicles and auto parts as the two countries reached a ceasefire in the trade war.
In October, Tesla announced on its site that if U.S. customers needed to order a Model S, Model X, or Model 3 before October 15, if they wanted the full federal tax credit of $ 7,500, it will begin to be phased out. once the manufacturer sells 200,000 qualified vehicles. in the United States (Tesla reached that milestone earlier this year). As a result, the federal tax will be reduced by 50 percent to $ 3,750 for vehicles delivered from January 1 to June 30, 2019, before it is halved again on July 1.
On Sunday, Musk tweeted in response to a question that if a customer’s order prior to December is not delivered before the end of the year, Tesla will refund the tax credits they did not meet.
If Tesla committed to delivery and the customer made good faith efforts to receive by the end of the year, Tesla will cover the difference in tax credit
– Elon Musk (@Elon Musk) December 22, 2018
After months of production and delivery delays, Tesla increased its Model 3 order fulfillment in the third quarter of this year, when it delivered a total of 83,500 vehicles, including 55,840 Model 3 units.