The beginning of 2019 did not turn out to be positive for electric car maker Tesla. Investor exits in massive numbers ensured a bloodbath in the Elon Musk led company’s share price. Reason behind such panic mode selling has been attributed to the price cut announced by Tesla in its best selling cars Model 3, Model S and Model X in the US. On Wednesday, the share price of Tesla nosedived by over 10% to touch an intraday low of $298.80 on NASDAQ. However, the company managed to recover some losses by the end of trading session as it finished at $310.12 down by 6.81%. The price cut in US comes as bad news for promoters of Tesla, however, there is hope of a boost in demand as Model 3, Model S and Model X have now become much cheaper for customers. 

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To partially absorb the reduction of the federal EV tax credit, Tesla trimmed down the price of Model S, Model X and Model 3 vehicles in the U.S. by $2,000.

The Federal EV tax credit dropped from $7,000 to $3,750 from January 01, which is why, Tesla made its first move to boost demand for its electric cars this year. 

In its filing at SEC, Tesla explained that, customers can apply to receive the $3,750 federal tax credit for new deliveries starting on January 1, 2019, and may also be eligible for several state and local electric vehicle and utility incentives, which range up to $4,000.

Further Tesla said, “Combined with the reduced costs of maintenance and of charging a Tesla versus paying for gas at the pump – which can result in up to $100 per month or more in savings – this means our vehicles are even more affordable than similarly priced gasoline vehicles.”

Currently, a total 1,010 Model 3 vehicles and 1,897 Model S and X vehicles were in transit to customers at the end of Q4, and will be delivered in early Q1 2019. 

Tesla said, “Our inventory levels remain the smallest in the automotive industry, and we were able to reduce vehicles in transit to customers by significantly improving our logistics system in North America.”

Tesla has made it clear that it wants to go big with its Model 3 in electric vehicle market. The company added in its filing, “there remain significant opportunities to continue to grow Model 3 sales by expanding to international markets, introducing lowerpriced variants and offering leasing. “

International deliveries in Europe and China will start in February 2019. Expansion of Model 3 sales to other markets, including with a right-hand drive variant, will occur later in 2019. 

In the year 2018, Tesla delivered a total of 245,240 vehicles: 145,846 Model 3 and 99,394 Model S and X.

Coming back to Tesla’s stock performance! Although at present investors have a little faith in this Elon Musk’s company, however, it is seen as money making magnet ahead. 

Earlier a Wedbush Securities analyst Daniel Ives reportedly said in a note to investors,"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.

In Wedbush's view, Tesla has a potential of reaching $440 level.