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Tesla shares skid after China sales fell to the lowest level in over a year

Published 03/04/2024, 01:25 PM
Updated 03/04/2024, 11:42 PM
© 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

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.

© 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

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.

Latest comments

Musk busy di/.cking around with Twitter and thinks he can get paid 50 billion. Insane.
TSLA is positioned to better withstand the turmoil of a new industry. TSLA is marketed internationally which not only helps but exposes it to greater fluctuations in the international market. I doubt that many of the Chinese EV manufacturers will still be in business 5 years from now.
Share prices appear to be spiraling downward.
Ya because of panic sellers crying about a 15 dip in sales in china of all places
Not a growth company any more.
AGAIN Reuters against Tesla. Dear Reuter, ALL EV'S falling today, not only Tesla! IDIOTS!
Glory days are over folks!
socialist Elona Muskenko :D
Good time to buy...not often TSLA has a sale
yes, we all did it from time to time. but today's situation is different: instead of laughing Mask starts to be afraid of BYD. Mask is 5-10 fold faster in development than Boeing or other US companies but really 2 times slower than BYD and also other Chinese. I only hope Mask will take 1-2 years
 doesn't have a "u" key or not very bright
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