In the U.S., drivers who purchase a battery electric vehicle qualify for a $7,500 Federal Tax Credit on the purchase of their vehicle-unless the automaker has sold more than 200,000 electric vehicles.
In a recent note to investors obtained by CNBC, Wedbush Securities analyst Dan Ives has predicted that demand for Tesla's Model 3 sedan "looks very strong into 2019 and beyond", something that could reduce the risk for the electric auto maker needing to raise capital again in the near future.
He believes Wall Street is now "focusing on the demand opportunity rather than the production issues" that dominated much of the coverage-as well as investors' questions-of Tesla this year.
At the time, Tesla claimed that the move was created to absorb "a significant part of the tariff to help make cars more affordable for customers in China".
With all the flack Tesla gets for its inability to consistently meet its stated production goals, it's easy to overlook the fact that demand for the Model 3 has remained incredibly strong for more than two years now.
The most important view to note here is - Dan Ives thinks Tesla may not need a capital raise in the near term.
This is the third time in the last two months that Tesla reduced the prices in China.
Beginning in July of 2019, the federal tax credit for new Tesla purchases will drop down to $1,875. Elon Musk said the deadline is 2020 for generation however has not yet said where it will be created whether in the United States or China. The base price for a Model 3 in China is now 499,000 yuan ($72,000).
Tesla's stock has gone down 5% this year, closing at $295.39 yesterday.
On November 22, Tesla cut the prices of its Model 3s to make cars more affordable to Chinese customers.
As of writing, Tesla shares are trading up +.53% at $296.95.