Tesla (TSLA) stock ended down more than 3.5% on Friday after the automaker announced new price cuts in China, following a drop on Thursday on news that the company is halting production at its Giga Berlin factory due to disruptions from offshore-related suppliers. the Red.
After more than doubling in 2023, Tesla stock is down more than 12% so far this year.
Tesla revealed on its website in China new prices for its Model 3 sedan and Model Y SUV, as the Model 3 saw a 5.9% reduction to 245,900 yuan ($34,600) and the Model Y received a 2.8% price reduction to 258,900 yuan ($36,400). ). Bloomberg News was the first to report these price changes.
Tesla's price cuts in the region began in late 2022 and early last year, disrupting the industry and prompting other automakers in China to cut prices in order to compete.
Tesla's new price cuts come as competition continues to heat up on the mainland, with rivals such as NIO and BYD announcing new models. BYD has also become more upmarket, pushing into sectors where Tesla has operated with success. Declining margins due to price cuts around the world have dampened investor sentiment on Tesla shares in recent weeks.
Although BYD sells more cars than Tesla in China, Tesla had a strong month in December Sales jumped nearly 69% in December to 94,139 units, according to the China Passenger Car Association. BYD, which sells hybrids and pure electric vehicles, sold 341,043 vehicles in China in December, up 45% from a year ago.
Giga Berlin stopped working due to the Red Sea attacks
As I mentioned for the first time before ReutersTesla announced that it will suspend most production at its Gigafactory Berlin in Germany due to a shortage of components and parts coming from suppliers using transportation routes in the Red Sea.
Attacks launched by Iranian-backed Houthi militants, in solidarity with the Palestinian Islamic movement Hamas in its war against Israel in Gaza, disrupted one of the most important shipping routes in the world, but the American electric car manufacturer Tesla is the first company to reveal the resulting outage. Reuters reported on Thursday.
The United States and its allies responded to the Houthis early Friday morning with missile strikes on Houthi targets inside Yemen in retaliation for attacks on commercial tanker ships.
Tesla subsidiary Giga Berlin is building the Model Y SUV exclusively for European and other select markets.
In a statement to Reuters, Tesla said supplier components coming from Asia will have to divert routes from the Red Sea and Suez Canal to around the Cape of Good Hope in South Africa, leading to longer lead times and “gaps in supply chains.”
Swedish carmaker Volvo said on Friday it would do so Stopping some production at a factory in Belgium Due to delays in getting gearboxes from suppliers who had to use longer shipping methods.
Although the Tesla GigaBerlin is not as productive as its factories in Shanghai and Fremont, California, it has reached 5,000 Model Ys were produced in a week in May last year, meaning about 10,000 or so vehicles may have been affected. According to TeslaGiga Berlin has an annual installed capacity of 375,000 vehicles, while Giga Shanghai has more than 950,000 units.
The next big test for Tesla and its shareholders will come in less than two weeks, when the automaker reports fourth-quarter earnings results after the bell on Wednesday, January 24.
Pras Subramanian is a reporter for Yahoo Finance. You can follow it Twitter and on Instagram.
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