© Reuters. FILE PHOTO: A staff member looks at Tesla’s new Model 3 sedan displayed next to Model X SUV at the China International Fair for Trade in Services (CIFTIS) in Beijing, China September 2, 2023. REUTERS/Florence Lo/File Photo
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By Hyunjoo Jin
SAN FRANCISCO (Reuters) -Shares in Tesla (NASDAQ:TSLA) 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 (SZ:002594).
“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.
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.
Source: Investing.com
