Tesla drops vehicle prices as federal incentive phases out

The Model S, X and 3 have all been discounted by $2,000.

Tesla has reduced its vehicle prices to help offset the drop in federal EV incentives for the company's vehicles.

The Model 3, S and X have all been discounted by $2,000, bringing the Model 3 entry price down to $44,000.

After Tesla built its 200,000th EV, the federal incentive has been cut in half from $7,500 to $3,750 for vehicles delivered in 2019. The company recently promised to compensate owners who had been told their vehicle would be delivered by the end of 2018 but were delayed into 2019 after the incentive dropped.

The Model 3 will eventually start at just $35,000, though the bare-bones configuration is not expected to arrive until later this year. Tesla is still trying to minimize production costs to bring the per-vehicle price below its current floor of around $38,000.