Two calendar quarters after a company sells 200,000 electric vehicles in the U.S., the tax credit begins to phase out.
In China, Tesla is adopting an aggressive campaign to push the Model 3 to its ever-growing electric auto market. Elon Musk has saidthat 2020 is a likely target for production, but hasn't announced if that will happen at the Gigafactory in Nevada, or at the Gigafactory that Tesla is just breaking ground on outside Shanghai for building the Model 3.
According to the analyst, " Tesla has evolved into one of the most dynamic technology innovators over the last 30 years and, in our opinion, has put itself into an esteemed category of companies such as Apple and Amazon that have revolutionized consumer buying habits and behaviors over the last decade". Tesla reportedly said that it was "absorbing a significant part of the tariff to help make cars more affordable for customers in China".
Looking ahead to the next year, analyst Dan Ives believes that Model 3 demand remains robust and that consumers are growing more interested in the mass market EV as demand for bulkier cars like SUVs slows down. Tesla's capital needs have been an ongoing issue for the company, and Tesla has had to return to the markets several times since it went public in 2010.
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It's the third time since November that Tesla has tweaked its Chinese pricing.
However, from January 1st, 2019, the tax credit would be dropped to $3,750. The starting price for a Model 3 in China now is 499,000 yuan ($72,000). Tesla's need for a capital raise has been a big point of concern for the company's critics, and it has been a particularly notable topic for Elon Musk as well.
Tesla will reveal its fifth vehicle, the Model Y in March of 2019.
Tesla's stock has gone down 5% this year, closing at $295.39 yesterday. And earlier this month, the automaker cut prices on those models again after the Chinese government temporarily removed the additional 25% tariff that was levied against United States autos as part of the trade spat.