Tesla shares slip after electric car giant unveils price cuts in China
Investing.com -- Shares in Tesla (NASDAQ:TSLA) dipped in premarket U.S. trading on Monday after the electric carmaker slashed the prices for some of its China-made vehicles, fueling concerns over an intensifying price war in the country.
In a statement on Monday, Tesla said starting prices for both its Model Y long-range and performance models were reduced by 4.5% and 3.8%, respectively.
Tesla added it would offer insurance subsidies to buyers of its entry-level, rear-wheel drive Model 3 in China until the end of September, in a fresh sign of the fierce competition for electric vehicle market share in China. Geely Automobile Holdings' (HK:0175) Zeekr brand and Zhejiang Leapmotor Technology (HK:9863), both rivals to Tesla in the country, have rolled out similar reductions.
Sales of Tesla cars made in the country dropped by 31% month-on-month in July, the first decline since December.
The company has been offering deeper discounts both in and out of China since late last year in a bid to protect market share. Chief executive officer Elon Musk has also hinted that Tesla would continue to slash prices even if it crimps profit margins.
In a call with analysts last month, Musk said it made sense to «sacrifice margins to make more vehicles,» arguing that the value of Tesla's cars will go up once its Full Self-Driving mode is perfected.
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