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Tesla (TSLA) stock fell for the second day in a row as the automaker announced price cuts in China and halted production at Giga Berlin due to Red Sea-related supplier disruptions.
Tesla has revealed new prices for its Model 3 sedan and Model Y SUV on its Chinese website, with the Model 3 dropping 5.9% to 245,900 yuan ($34,600) and the Model Y dropping 2.8%. The price was set at 258,900 yuan ($36,400). . Bloomberg News first reported these price changes.
Tesla’s price cuts in the region began in late 2022 and early last year, disrupting the industry and causing other Chinese automakers to cut prices to compete.
Tesla’s new price cuts come as competition on the mainland continues to intensify as rivals such as NIO and BYD unveil new models, with BYD offering even more premium offerings to the segment in which Tesla has operated and been successful. route is being introduced. Investor confidence in the company’s stock has weakened as profit margins have declined due to price cuts around the world, and the stock price has fallen 12% in the past month.
BYD sells more vehicles in China than Tesla, but Tesla had a strong December, with December sales increasing nearly 69% to 94,139 vehicles, according to the China Passenger Vehicle Association. . BYD, which sells hybrid cars and pure EVs, sold 341,043 vehicles in China in December, an increase of 45% from the previous year.
Giga Berlin halted due to Red Sea attack
As first reported by Reuters, Tesla announced it would halt most production at its Giga Berlin factory in Germany due to a shortage of parts and parts from suppliers that use the Red Sea shipping route.
“Offences by Iranian-backed Houthi militants in solidarity with the Palestinian Islamist group Hamas in the fight against Israel in Gaza have disrupted one of the world’s most important transport routes, but the US electric car manufacturer Tesla is the first company to disclose the resulting disruption to “production,” Reuters reported on Thursday. The United States and its allies struck back against the Houthis early Friday, firing missiles at Houthi targets inside Yemen in retaliation for a Houthi attack on a civilian tanker ship.
Tesla’s Giga Berlin exclusively manufactures the Model Y SUV for Europe and other selected markets. Tesla said in a statement to Reuters that supplier parts coming from Asia will have to be rerouted from the Red Sea and Suez Canal to around South Africa’s Cape of Good Hope, leading to longer lead times and “gaps in the supply chain.” said.
Swedish carmaker Volvo also announced on Friday that it would suspend some production at its Belgian factory due to delays in getting gearboxes from suppliers and the need to use longer transport routes.
Although the productivity of Tesla’s Giga Berlin is not as high as that of factories in Shanghai or Fremont, California, 5,000 Model Ys produced in one week in May This means around 10,000 vehicles could be affected. According to Tesla, Giga Berlin’s annual installed capacity is 375,000 vehicles, compared to Giga Shanghai’s annual capacity of more than 950,000 vehicles.
That said, the next big test for Tesla and its shareholders will come in less than two weeks when the automaker releases its fourth-quarter results after the bell on Wednesday, January 24th.
Pras Subramanian is a reporter for Yahoo Finance.you can follow him twitter And even more Instagram.
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