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Tesla Inc. shares dropped as much as 9% on Wednesday for falling short on quarterly deliveries of its mass-market Model 3 sedan, as well as worries of future profitability, after the automaker slashed US prices for all its vehicles to offset lower green tax credits. The $2,000 price cut starts Wednesday on the Model 3 – as well as on its higher-priced Model S and Model X – and comes as automakers expect U.S. new vehicle sales to weaken in 2019, and increased competition from new electric vehicle entrants. Electric vehicle sales benefited from a $7,500 federal tax credit throughout 2018, but that expired at the end of 2018, and new buyers will now receive only half that amount. Read more to see how it stacks up against the all-electric Chevy Bolt and Nissan Leaf.
Total deliveries rose from the third quarter to 90,700 cars, but missed forecasts, which had been influenced by analysts’ expectations of a surge in buyers looking to cash in on the $7,500 tax credit before year-end. Overall, Tesla’s total production rose 8% to 86,555 vehicles, while churning out 61,394 Model 3s, up from a total of 53,239 Model 3s in the third quarter.