Tesla Shares Skid After China Sales Fell to The Lowest Level in Over a Year

March 05, 2024, 06.41 AM | Source: Reuters
Tesla Shares Skid After China Sales Fell to The Lowest Level in Over a Year

ILUSTRASI. A Tesla car is driven past a store of the electric vehicle (EV) maker in Beijing, China January 4, 2024.

MOBIL TESLA - SAN FRANCISCO. Shares in Tesla fell more than 7% on Monday after its sales declined in February in China, where it likely faced a slowdown during the Lunar New Year holidays.

The fall in sales in its key market dimmed the outlook for Tesla's global deliveries, at a time when the top EV maker is battling a decline in demand and rising competition, and is weighed down by a lack of entry-level vehicles and the age of its product line-up.

Tesla sold 60,365 China-made vehicles in February, down 19% from a year earlier and the lowest volume since December 2022, according to data from the China Passenger Car Association. Tesla's Shanghai factory makes Model Y and Model 3 electric cars for the local market, Europe and other countries, and accounted for over half of Tesla's global deliveries last year.

Tesla shares ended down 7.2% on the day at $188.14, a slump of about 24% since the start of the year.

China's Lunar New Year holidays fell in February, reducing car purchasing activities. Tesla has introduced a series of price cuts and incentives to fend off slowing demand and rising competition from Chinese rivals such as BYD.

"It's been a perfect storm of headwinds for Tesla in China. This was a negative data point that adds fuel to the fire around the stock," Wedbush analyst Dan Ives said.

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Last week, Tesla unveiled new incentives including insurance subsidies to woo consumers in the world's largest auto market.

BYD on Monday launched a new version of its best-selling car at a price lower than the final price of its discontinued predecessor, escalating a price war with rivals. BYD also saw its sales fall 37% to 122,311 in February from a year earlier.

In the United States, Tesla this month offered 5,000 free Supercharging miles to customers who trade in their older vehicle to get a new Tesla vehicle by March 31. In February, Tesla temporarily cut prices of some of its Model Y cars in the U.S.

Analyst Troy Teslike revised down his forecast for Tesla global deliveries for the first quarter of this year, saying weaker-than-expected China sales despite a price cut suggested "a demand problem."

In January, Tesla warned of "notably lower" sales growth this year as it focuses on the production of its cheaper electric vehicle.

Editor: Wahyu T.Rahmawati

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