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Important points
- Tesla shares fell on Monday after deliveries from the company’s Shanghai Gigafactory hit the lowest level in more than a year, according to data from the China Passenger Vehicle Association.
- Chinese New Year celebrations in February had a negative impact on sales as well as intensifying domestic competition.
- Tesla continues to use price incentives to drive sales, a strategy echoed by Chinese manufacturers such as Xpeng and BYD.
Tesla Inc. (TSLA) stock is at its lowest level in more than a year, new sales data shows deliveries from the company’s Shanghai Gigafactory are at their lowest level in more than a year due to the recent Chinese New Year and domestic competition. As a result, the stock fell more than 7% on Monday.
The company reportedly delivered 60,365 vehicles from its Chinese factories in February, according to provisional data from the China Passenger Car Association (CPCA) on Monday. This is the lowest level since December 2022 and decreased by 19% compared to the previous year.
The latest figures were released against the backdrop of weak electric vehicle (EV) sales and intensifying competition in China, where car sales tend to experience a seasonal slump around the Lunar New Year at the beginning of each calendar year.
Tesla continued to adjust its pricing strategy earlier this month by offering Chinese customers insurance subsidies on its Model Y and 3 vehicles. This follows other data from the CPCA showing demand for domestic new energy vehicles fell 30% in January from December.
Tesla also faces stiff competition from domestic EV rivals like Warren Buffett-backed BYD (BYDDY) and Xpeng Inc. (XPEV). BYD announced on Monday that it will reduce the price of its updated Yuan Plus SUV by 11.8% compared to the price of the current version, while Xpeng will offer a discount of 20,000 yuan (approximately $2,780) on its best-selling G6 SUV by 3 It was extended until the end of the month.
Tesla stock fell 7.2% to close at $188.14 on Monday. The stock price has fallen by about a quarter since the beginning of the year.
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