Key points:
- Tesla cut starter prices for its Model 3 and Model Y according to Reuters
- The price cuts were up to 9%
- Tesla shares fell Monday
Tesla (NASDAQ: TSLA) reduced its starter prices for its Model 3 and Model Y by as much as 9% in China amid indications that demand in the largest car market in the world is declining.
Reuters stated Monday morning that the price cuts were posted on Tesla’s China website and were the first price cuts by the electric vehicle giant. The news follows Tesla’s recent offering of limited incentives to buyers who opted for its insurance last month.
The price cuts may be signalling a turnaround in price increases across the EV industry.
Also Read: Who Are Tesla’s Competitors?
Tesla Chief Executive Elon Musk recently commented on a recession of sorts taking place in China and Europe. As a result, Tesla said it will miss its vehicle delivery target this year.
Tesla fell 2.82% premarket following the news.
In order to be more competitive, Tesla reduced prices in China last year. However, the company has hiked prices in the U.S., its biggest market, due to increased costs.
Furthermore, China reported weaker retail sales, coming in at 2.5% compared to forecasts of 3.3%.
Consequently, several Chinese EV makers have seen their shares fall on Monday. Shares of Nio fell 9.46%, while Xpeng shares plummeted 10.21% and Li Auto tumbled 9.45%.
Elsewhere, Tesla reported its third-quarter earnings last week, which saw revenue fall short of Wall Street expectations. The company posted revenue of $21.45 billion and $3.3 billion in profit. In addition, it was reported earlier this month that Tesla's China-made sales hit a record in September.
