Shares of electric vehicle maker Tesla were sharply lower after data showed lower sales in China due to the Lunar New Year and competition.
TSLA – Daily Chart
Tesla shares dropped 7% on Monday to %188.14 and are pointing to a lower open on Tuesday. Support below the $187 level comes to around $150, with the 2023 lows at $110.
According to data from the China Passenger Car Association, Tesla sold 60,365 vehicles in February, down 19% from a year earlier and the lowest since December 2022.
The Chinese Lunar New Year added a seasonal slump to car purchases, but Tesla is also fighting against domestic competition from BYD and Xpeng.
Tesla, which cut prices on some models in China in January, also unveiled new incentives, including insurance subsidies, in March. However, its competitors are doing the same, with BYD announcing a cheaper version of an updated SUV on Monday, while Xpeng also extended a price cut into the end of March on its G6 model.
The US automakers’ lowest shipment total in over a year concerns the company and its investors, with China seen as a huge growth market. BYD was not immune to the slowdown, with its February sales dropping to 122,311 units from 193,655, down 37%.
According to a report from Deutsche Bank on Monday, Tesla’s latest incentives on the mainland include the “equivalent of ~$4.8K price cut to customers who purchase from existing inventories of Model 3 and Model Y vehicles by the end of March. “BYD has also said it does not plan to bring its vehicles to the United States.
“We’re not planning to come to the US,” Stella Li, CEO of BYD Americas, told Yahoo Finance Live. “It’s an interesting market, but it is very complicated,” she added, noting political pushback on Chinese companies and the slowing rate of EV adoption.
