{"id":48065,"date":"2023-08-14T04:32:43","date_gmt":"2023-08-14T08:32:43","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/tesla-is-cutting-prices-again-in-china-why-its-driving-up-concern\/"},"modified":"2023-08-14T04:32:44","modified_gmt":"2023-08-14T08:32:44","slug":"tesla-is-cutting-prices-again-in-china-why-its-driving-up-concern","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=48065","title":{"rendered":"Tesla Is Cutting Prices Again In China. Why It’s Driving Up Concern."},"content":{"rendered":"
\n
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<\/p>\n<\/figure><\/div>\n

\n Tesla
\n is discounting in China and cutting prices\u2014again. New reductions will lead to more questions about price wars and demand for electric vehicles in the world\u2019s largest market for new cars. <\/p>\n

Over the weekend,
\n Tesla
\n (ticker: TSLA) rolled out a new 8,000 Yuan, or about $1,100, incentive for certain Model 3 sedans in China. What\u2019s more, prices for the long-range and performance versions of the Model Y crossover vehicle came down by 14,000 Yuan, or about $2,000. <\/p>\n

\n

The price of a long-range Y now starts in China at about 300,000 Yuan, or $41,400. At the start of 2023, a long-rage Y started at about 358,000 Yuan, or $49,400. The performance version of Y now starts at about 350,000 Yuan, or $48,300. It started the year at about 398,000 Yuan, or $55,000. <\/p>\n

The cuts come days after Zeekr, an EV brand owned by Geely, cut prices for its Zeekr 001 crossover-sized vehicle. Prices for three versions of the Zeekr 001 came down about $5,000 on average, and base prices now range from about $40,000 to $52,000. <\/p>\n

Whether Tesla cut prices in response to Zeekr or to market conditions is hard to say. Tesla didn\u2019t respond to a request for comment about the cuts. <\/p>\n

So far, Chinese EV demand has been solid in 2023\u2014helped by price cuts. Through July, about 3 million battery-electric vehicles, or BEVs, have been sold, up about 23% year over year, according to Citi analyst Jeff Chung. New energy vehicles, which include BEVs and plug-in hybrids, accounted for almost 36% of all new car sales in July, up about two percentage points from June.<\/p>\n

Through July, Zeekr sold about 55,000 BEVs. That\u2019s only 2% of the market but it\u2019s an increase of about 127% year over year. In the first half of 2023, Tesla sold roughly 294,000 BEVs in China, up about 50% from the year before.<\/p>\n

Demand doesn\u2019t seem to be a problem, but accelerating price cuts from auto makers, including Tesla, will make demand a watch item for investors in the coming months. <\/p>\n

More cuts will also bring fresh concerns over profitability. While the cost to make vehicles and the mix of sales matter, price cuts typically pressure profit margins. That\u2019s been the case for Tesla in 2023. The company\u2019s operating profit margin in the second quarter came in at just under 10%, down from almost 15% a year ago.<\/p>\n

Price cuts have yielded some benefits, though. Tesla delivered a record 466,140 EVs in the second quarter and is on pace to deliver about 1.8 million EVs in 2023, up from 1.3 million delivered in 2022. <\/p>\n

Delivery growth is one reason Tesla stock is up about 97% so far this year, coming into Monday trading, easily outpacing the 16% and 30% comparable, respective gains of the
\n S&P 500
\n and
\n Nasdaq Composite.<\/span>\n <\/p>\n

The stock is up, but investors might want to brace for some early-week volatility while the market digests the new cuts.<\/p>\n

Write to Al Root at allen.root@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Tesla is discounting in China and cutting prices\u2014again. New reductions will lead to more questions about price wars and demand for electric vehicles in the world\u2019s largest market for new cars. Over the weekend, Tesla (ticker: TSLA) rolled out a new 8,000 Yuan, or about $1,100, incentive for certain Model 3 sedans in China. What\u2019s […]<\/p>\n","protected":false},"author":1,"featured_media":48066,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-48065","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nTesla Is Cutting Prices Again In China. Why It's Driving Up Concern. | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Tesla is discounting in China and cutting prices\u2014again. 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