Tesla cut the starting price of the Model 3 sedan in the U.S. weeks after a federal tax credit shrank in half, renewing concern over whether the electric-car maker can sustain sales with less support from incentives.The Model 3 now starts at US$38,990, according to Teslas website. Arndt Ellinghorst, an analyst at Evercore ISI, wrote in a report Tuesday that the halving of the U.S. tax credit to US$1,875 at the beginning of July is causing the company to reduce prices to support demand.The key question remains will Tesla be able to sustain itself given steadily declining ASPs and worsening mix? Ellinghorst wrote, referring to the average selling prices of the companys vehicles dropping as the Model 3 becomes a greater share of deliveries.While the starting price of the Model 3 has dropped, Teslas moves to simplify its lineup include dropping a standard-range version of its larger and more expensive Model S sedan. The cheapest version available is now US$79,990, according to the companys website.Tesla also cut prices on all vehicles shipped to China, with the Model 3 dropping to 355,900 yuan (US$51,764) from 377,000 yuan, according to a Tesla representative. Prices of the Model S and Model X were cut about 4 per cent to 776,900 yuan and 790,900 yuan, respectively.The changes wont affect prices of Model 3s that will be produced near Shanghai, according to the representative. Tesla is expecting to begin output at a factory there later this year.Tesla is adjusting prices in order to continue to improve affordability for customers, the Chinese unit said in a statement. We are standardizing our global vehicle lineup and streamlining the number of trim packages offered for Model S, Model X and Model
Origin: Tesla cut the starting price of its Model 3 — and it’s making investors nervous