Tesla’s stock experienced a drop of over 7% on Monday due to the lowest delivery numbers from the Shanghai Gigafactory in over a year. The Chinese New Year celebrations in February impacted sales negatively, and local competition intensified. In an effort to boost sales, Tesla continues to use price incentives, but Chinese manufacturers like Xpeng and BYD are also employing similar strategies.
China reportedly delivered 60,365 vehicles from the Shanghai Gigafactory in February, the lowest level since December 2022 and 19% lower on an annual basis, according to preliminary data released by the China Passenger Car Association (CPCA). Vehicle sales tend to experience seasonal slowdowns around the Chinese New Year, but the latest figures come amid slower electric vehicle (EV) sales and an increasingly competitive environment in the country.
Tesla recently adjusted its pricing strategy by offering insurance incentives to Chinese customers for Model Y and Model 3 vehicles earlier this month. This move was in response to other data from the CPCA, which indicated a 30% decline in demand for new energy vehicles in China from January to December. Tesla also faces stiff competition from local EV rivals, including Warren Buffett-backed BYD and Xpeng Inc.
BYD reduced the price of its updated Yuan Plus SUV by 11.8% compared to the current version, while Xpeng announced a 20,000 yuan (approximately $2,780) discount on its best-selling G6 SUV until the end of March. Tesla shares closed at $188.14, down 7.2% on Monday, losing approximately a quarter of their value since the beginning of the year.
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