Tesla Says Goodbye to Rough 2018 And Begins 2019 with New Tax Credits

A new year has finally begun and that just means that another year has become a part of the past. For some people, it simply means that there are now new things to look forward to, especially if you are in the business industry. A new chapter begins and it will be up to you how the story will go.

As for one of the most popular car company in the world, Tesla surprisingly had such a mediocre year since they both had good and bad quarters. However, it would seem that they will start 2019 with a major bang after their shares tumbled by 9.7 percent just a few days in the new year.

This wasn’t a surprise for some experts because it is believed that some of their investors are now putting their attention to the possible roadblocks that could be a hindrance such as new and better competition coming out and even the problem phasing out of federal tax credits that will surely affect the cost of most of the company’s battery-electric vehicles.

Congratulations @Tesla team!! pic.twitter.com/PBr9VVBv1S

— Elon Musk (@elonmusk) January 1, 2019

A Challenging 2018

It is known that Tesla had a bit of a rough time in 2018, which is why almost everyone was surprised when their chief executive officer and founder, Elon Musk posted a tweet wherein he congratulated his team as the year ends. 2018 was indeed a rollercoaster ride for them, there was the issue about Musk’s sudden announcement where he said that he will soon make Tesla a private company and shareholders and investors panicked about it.

He also revealed the company’s struggle over the crisis on the assembly plant in California as well as his own struggles that he admitted on his Twitter account. Musk even said in an interview with New York Times how he has been having troubles sleeping since he’s working over 40 hours a week.

Now that a new year has finally begun, everyone wonders what Tesla has in store for their investors and customers. It was also announced sometime last year that there will soon be a Tesla factory in China, to be able to meet the demands and to save money from all the tariffs because of the trade wars between China and the United States.

Aiming to finish initial construction this summer, start Model 3 production end of year & reach high volume production next year

— Elon Musk (@elonmusk) January 7, 2019

Edmund executive director of industry analysts Jessica Caldwell speculates that the electric car company started their year with a massive hit of reality to be able to become a more mature company.

This may be a little difficult to understand since Tesla has managed to put out over 245,000 vehicles last year and even made an all-time record by almost matching their record sales in 2017. The demand for Tesla vehicles rose so much during the final quarter of 2018 and they even managed to exceed experts expectations on delivers by over 8 percent. Because of this, they have become the leading producer of battery-electric vehicles in the entire world.

Prices and Expectations

Because of how much success they have been getting, the federal tax credits for Tesla customers were cut in half by the Congress and it has taken effect on the first day of the year. That means from $7,500 per vehicle, it will now only be $3,750 since Tesla has managed to cross over 200,000 sales threshold. This was based on the tax reform bill that was passed in 2017 and it will be cut in half once more until 2020 when the incentives run out.

Tesla CEO @elonmusk with Shanghai Mayor Ying Yong at Tesla Shanghai Gigafactory ground breaking ceremony. $TSLA #Tesla #China #TeslaChina #GF3 pic.twitter.com/sIecnGsU71

— Vincent (@vincent13031925) January 7, 2019

This led to Tesla having to make the decision of reducing the blow and dropped the price for their newest models by $2,000 less. It is not clear, however, if this move will help the current crisis Tesla is facing within the electric vehicle market. According to some analysts from Wall Street, some of the investors were gobsmacked by the decision that was made by Tesla, and some are a bit worried about how well the profits will go this year.

JP Morgan analyst Joseph Osha said that this price reduction is indeed very controversial but most investors still have faith in Tesla especially with the order it and the demand all come to the world. These concerns also led to some analysts and investors staying bullish towards Tesla, Reputation Management Consultants CEO Eric Schiffer even stated that he thinks Tesla’s advantage is their CEO Elon Musk.