Tesla Inc. TSLA distributes additional incentives China Buyers as the country grapples with the impact of On and off repeats of COVID-19.
What happened: Tesla’s Chinese customers who choose to purchase an existing car would receive a 6,000 yen ($860) discount, according to Reuters reportedciting a company representative.
The latest price moves come after a price cut of up to 9% announced by Tesla in late October. The company followed up with another price adjustment in early November when it announced a 4,000-yuan cut in insurance subsidies.
See also: The best China stocks
Tesla and most of its Chinese competitors follow a build-to-order model. Only when orders are canceled or companies overproduce are they left with unsold inventory, CnEVPost reported.
Why it matters: A Reuters report this week, citing sources, said Tesla is cutting Model Y vehicle production at its Giga Shanghai plant by 20% in December. This was later denied by the company.
However, the successive price cuts lent credence to the theory that demand in China may be faltering. Piper Sandler Analyst Alexander Potter said in a recent note that he expects more price cuts from Tesla to make their vehicles affordable.
He probed the possibility that the company might be running out of buyers in the price points above $50,000 given the shaky macroeconomic situation and ongoing COVID-19 disruptions.
According to Tesla, Tuesday’s session closed 1.44% lower at $179.82 Benzinga Pro data.
[ad_2]
Source story
