Electric automaker Tesla has reduced prices in China for the second time in less than three months.
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The company first slashed prices in China in late October 2022 — dropping prices of Model 3s and Model Ys by about 9.4%, CNN reported. Now, the price cuts are even deeper as Tesla struggles to maintain sales in China amid shrinking demand. The starting price for the Tesla Model 3 has been reduced by a further 13.5% to 229,900 yuan ($33,515), and the starting price for the Model Y has dropped by another 10% to 259,900 yuan ($37,889), according to CNN calculations.
According to Reuters, between the discounts and incentives Tesla is offering to Chinese buyers, prices are down between 13% and 24% overall since September.
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Following the news of the price cuts, Tesla stock fell by 7%, marking its worst day on Wall Street since August 2020. This time last year, Tesla stock was trading at around $342. As of Friday morning, it’s down to $107.
Although Tesla was once the leader in the electric vehicle market, demand for its cars has waned as other automakers have entered the space with more affordable models.
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The price cuts came after the company reported a weak production-to-delivery ratio for Q4 of 2022, producing 34,000 more vehicles than it delivered, per Yahoo Finance. With excess inventory and shrinking demand, it’s possible Tesla prices might decline even further.
