Tesla stock (TSLA) fell more than 3.5% on Friday after the automaker announced new price cuts in China, following Thursday’s decline on news that the company will shut down production at its Giga Berlin factory due to supplier disruptions related to the Red Sea. Still working.Thank you for reading this post, don't forget to subscribe!
After more than doubling in 2023, Tesla stock is down more than 12% so far this year.
On its China website, Tesla revealed new pricing for its Model 3 sedan and Model Y SUV, with the Model 3 price down 5.9% to 245,900 yuan ($34,600) and the Model Y down 2.8% to 258,900 yuan ( $36,400). Bloomberg News was the first to report these price changes.
Tesla’s price cuts in the region began in late 2022 and early last year, causing a stir in the industry and forcing other Chinese automakers to cut prices to compete.
Tesla’s new price cuts come as competition on the mainland continues to grow, with rivals such as Nio and BYD announcing new models. BYD has also become more advanced, moving into areas where Tesla has worked and found success. Shrinking margins due to price cuts around the world have weakened investor sentiment on Tesla stock in recent weeks.
Although BYD sells more vehicles than Tesla in China, Tesla had a strong December, with December sales rising nearly 69% to 94,139 units, according to the China Passenger Car Association. BYD, which sells hybrid and pure EVs, sold 341,043 cars in China in December, up 45% from a year earlier.
Tesla’s new Model 3 sedan is displayed at the China International Fair for Services Trade in Beijing, China on September 2, 2023. (Florence Low/Reuters) (Reuters/Reuters)
Giga Berlin deactivated due to Red Sea attacks
As first reported by Reuters, Tesla announced it would suspend most production at its Giga Berlin plant in Germany due to a shortage of components and parts coming from suppliers using Red Sea transportation routes.
In solidarity with Palestinian Islamist group Hamas in the fight against Israel in Gaza, attacks by Iran-backed Houthi militants have disrupted one of the world’s most vital shipping routes, but US electric vehicle maker Tesla is the first company to respond to the resulting The obstruction is revealed. For output,” Reuters reported on Thursday.
The US and its allies hit back at the Houthis on Friday morning with missile strikes on Houthi positions inside Yemen in response to attacks on commercial tanker ships.
Tesla’s Giga Berlin manufactures the Model Y SUV exclusively for European and other select markets.
In a statement to Reuters, Tesla said supplier components coming from Asia would have to be rerouted through the Red Sea and the Suez Canal around the Cape of Good Hope in South Africa, causing longer lead times and “gaps in supply chains.” will be.
Tesla production at the Berlin Gigafactory in Grünheide, Germany is still halted due to the armed conflict in the Red Sea and related changes in transportation routes between Europe and Asia. (Patrick Poole/Poole via AP, file) (Associated Press)
Swedish automaker Volvo also said Friday it would halt some production at a plant in Belgium due to delays in receiving gearboxes from suppliers forced to use longer shipping routes.
Although Tesla’s Giga Berlin is not as productive as its plants in Shanghai and Fremont, California, it reached 5,000 Model Ys were produced in one week in May Last year, that means around 10,000 vehicles may have been affected. According to Tesla, Giga Berlin has an installed annual capacity of 375,000 vehicles, while Giga Shanghai has an installed annual capacity of more than 950,000 units.
The next big test for Tesla and its shareholders will come in less than two weeks, when the automaker reports fourth-quarter earnings results after the bell on Wednesday, Jan. 24.
Prasad Subramaniam is a reporter for Yahoo Finance. you can follow him Twitter and on Instagram,
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