Tesla (unsplash photo)
Tesla has slashed the prices of some vehicles in China by more than 40% compared to their sticker price in the US, as Elon Musk’s electric car maker responds to waning demand in the region.
After a new round of discounts revealed this week, the base version of Tesla’s Model Y SUV is available in China for the equivalent of $37,875 — a 43 percent discount compared to the cheapest Model Y on sale in the U.S., Bloomberg reported Friday. The new price in China is a discount of 10% from its previous height.
In addition, Tesla cut the price of the base version of its flagship model 3 in China by 10% to an amount equivalent to about $33,575. The Model 3 is currently about 30% more expensive in the US. Tesla has also lowered prices for vehicles in Japan, South Korea and Australia as it tries to boost demand and overcome competition in the electric vehicle market.
The latest cuts were revealed days after Tesla startled investors by reporting fourth-quarter vehicle delivery numbers that fell short of Wall Street expectations. The 405,278 vehicle deliveries were a personal best but were still below the 432,117 expected by analysts.
Despite the news, Tesla shares rose 2.5% on Friday. The company’s stock is off to a rough start to the year after dropping 65% in 2022 – its worst annual performance.
More in-
In a post on the Chinese social media platform Weibo, Tesla Vice President Grace Tao said the discounts were the result of engineering innovations and calls from Beijing to boost economic development.
Tesla executives have faced months of supply chain difficulties, particularly in China, where a surge in coronavirus cases has forced the company to temporarily shut down production at a central factory in Shanghai.
Elsewhere, Tesla investors were upset when Musk devoted more of his time and energy to running Twitter. Analysts say that Musk’s controversial moves on Twitter, including rounds of layoffs, cost-cutting measures and more, have become a burden on Tesla stock.
Last week, several Wall Street firms cut their price targets for Tesla in response to the tepid report. Tesla’s quarterly numbers are closely watched because they are the closest indication of actual unit sales the company discloses.
“Overall demand is starting to crack a bit for Tesla and the company will need to adjust and cut prices more, especially in China which remains key to the growth story,” Wedbush analyst Daniel Ives said in a note to clients.
The price of used Tesla vehicles also began to decline, falling 17% from a peak of $67,297 in July to $55,754 in November, according to a recent Reuters report. During the same span, the overall price of used cars fell by only 4%.
Comments to the article(0):
Your response has been received and will be published subject to the system policy.
Thanks.
for a new comment
Your response was not sent due to a communication problem, please try again.
Return to comment