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Tesla shares slip after deliveries of carmaker's China-made EVs hit 14-month low

Published 03/04/2024, 10:49 PM
Updated 03/05/2024, 06:12 AM
© Reuters.

Investing.com -- Shares in Tesla (NASDAQ:TSLA) slipped in premarket U.S. trading after the electric vehicle (EV) giant said shipments of its China-made cars had dropped to a 14-month low in February.

Deliveries of EVs made at Tesla's plant in Shanghai declined by 19% year-on-year to 60,365, the lowest level since December 2022, likely due to disruptions caused by the Lunar New Year holidays.

The drop came as the firm engaged in a bitter price war with its Chinese peers to capture the world’s largest EV market. Last week, Tesla introduced just under $5,000 worth of new incentives in a bid to entice Chinese customers to buy its Model Y and Model 3 cars.

Weakening demand also brings up the prospect of more price cuts in the country -- a trend that bodes poorly for all EV players in China, given that it has eaten into profit margins.

Shares of Chinese electric vehicle makers, including BYD (SZ:002594) (HK:1211), Nio (HK:9866), Xpeng (HK:9868) and Li Auto (NASDAQ:LI) (HK:2015), also fell on Tuesday in Hong Kong trade. 

BYD had overtaken Tesla as the best-selling EV maker in December, with the firm seemingly commanding a much stronger sales presence in its home market. The company’s February sales decreased by 37%, but remained well ahead of Tesla by overall volume.

Ambar Warrick contributed to this report.

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