>> Shares of Tesla sank Wednesday, falling as much as ten percent at one point after the company announced it's cutting the prices for all its cars in the US by $2 thousand The move comes after a federal tax credit for electric vehicles was cut in half at the end of 2018.
>> It's always a lot of fun when you win.>> After a major tax overhaul passed by the Republican controlled Congress in 2017. In a Saturday tweet, CEO Elon Musk had urged buyers to make use of the $7,500 tax credit before it got slashed. And from now on it will be reduced by 50% every six months until it phases out.
>> These price cuts are ostensibly a reaction to the phasing out of the federal tax. Subsidy. But if it is giving away discounts now on its cars, analysts are concerned that margins will be eroded and this nascent profitability will go by the wayside. And let's remember that Tesla has never posted an annual profit.
Also weighing on the stock Wednesday was fewer than expected deliveries of the model three sedan in the last quarter of the year. Musk's been under intense pressure to deliver on his promise of stabilizing production of Tesla's first mass-market vehicle, seen as crucial to achieving long-term profitability. Production in the fourth quarter was broadly in line with Musk's promises.
With Tesla churning out almost 1,000 Model 3s a day, but for Wall Street that number just wasn't quite good enough.