Before January 1, Tesla buyers were entitled to a tax credit of $7,500.
But he further claimed that those numbers are not a good representation of how much demand there is for the Model 3 as the company is not actually attempting to sell the vehicle yet: "I think this is inconsequential because with a small amount of effort, we could easily drive the Model 3 reservation number to something much higher, but there's no point".
Tesla has been struggling to ramp up production of its Model 3 sedan, which is crucial to the company's long-term profitability.
Shares of electric auto and solar panel maker Tesla Inc. tumbled Wednesday, Jan. 2, 2019, morning after the company cut vehicle prices by $2,000 and announced fourth-quarter sales figures that fell short of Wall Street estimates.
Also on Wednesday, General Motors said it had sold its 200,000th electric vehicle in 2018, similarly triggering a phase-out of the federal tax credit, according to a source.
Tesla said it was churning out nearly 1,000 Model 3s daily, broadly in line with Mr Musk's promises but slightly short of Wall Street expectations.
The company also announced on Wednesday that it was cutting the price of its Model S, Model X and Model 3 vehicles by $2,000 in the US.
Tesla's shares sank heavily in morning trading, falling over 9% when markets opened.
The Model 3 now starts at $45,200 with destination for the Mid Range version; it is the cheapest new Tesla currently for sale (the long-promised $35,000 Standard Range version is now said to be four to six months away).
Tesla shares fell after the electric auto maker delivered fewer-than-expected Model 3 sedans in the fourth quarter and cut prices for all its vehicles in the US. Tesla's own internal tracking shows its deliveries were in line with or above estimates, spokesman Dave Arnold told reporters.
Tesla boosted production during the quarter, churning out 86,555 vehicles, up 8 percent from 80,142 during the third quarter, the company said.
FactSet, which compiled an average estimate from nine analysts, projected that Tesla would deliver 2000 more vehicles than it did, including 1750 more Model 3 vehicles. The vehicle has been delivered only to North American customers and in its mid to higher priced configurations.
"There remain significant opportunities to continue to grow Model 3 sales by expanding to worldwide markets, introducing lower-priced variants and offering leasing", Tesla said.
The electric auto maker delivered 63,150 Model 3 vehicles in Q4 2018 versus the expected 63,698.