Tesla stock ended a decline of more than 3.5% after the carmaker announced new price cuts in China, following a drop on Thursday due to news that the company was disrupting production at its Giga Berlin plant due to disruption to suppliers linked to the Red Sea. After more than doubling in 2023, Tesla’s stock has fallen more than 12% so far this year.
2024 could be a difficult year for Tesla. In the long term, the company aims to increase production at a rate of 50% per year. That means 2.77 million cars will be produced in 2024, which seems overstated. Tesla’s management has stated that year-on-year growth could deviate from the 50% target.
Tesla revealed on its website in China new prices for its Model 3 sedan and Model Y SUV, with the Model 3 seeing a 5.9% reduction to 245,900 yuan ($34,600) and the Model Y receiving a 2.8% price reduction to 258,900 yuan ($36,400).
Tesla’s price cuts in the region began in late 2022 and early last year, disrupting the industry and prompting other automakers in China to lower prices in order to compete.
Tesla’s new price cuts come as competition continues on the mainland, with rivals such as NIO and BYD announcing new models. BYD has also become more luxurious, rushing into sectors where Tesla has worked and achieved success. Lower margins due to price cuts around the world have dampened investor sentiment on Tesla shares in recent weeks.
Although BYD sells more cars than Tesla in China, Tesla did a strong job in December, with sales jumping nearly 69% in December to 94,139 units, according to the China Passenger Car Association.
Tesla stock falls as Tesla’s German factory temporarily closes
Tesla stock falls as Tesla said it had temporarily halted most production at its German plant due to attacks in the Red Sea, a vital global shipping lane.
The electric carmaker said in a statement on Thursday night that its plant near Berlin, which makes Model Y cars and batteries, will be temporarily halted from Jan. 29 to Feb. 11.
It’s a new sign of how hostilities in the Middle East are disrupting global manufacturing supply chains, with shipping companies reporting having to redirect ships carrying goods and components on the longer route around Africa’s southern tip. Analysts say the diversion adds 10 days or more to the voyage.
“Armed conflicts in the Red Sea and associated shifts in transport routes between Europe and Asia via the Cape of Good Hope are also affecting production at Grunhead,” Tesla said. “Significantly longer transport times create a gap in supply chains.”
On Jan. 5, Tesla decided to recall 1.6 million vehicles in China to update software that carries “safety risks,” in a severe blow to the US manufacturer, which has been overtaken by Chinese rival BYD in electric car sales.
Tesla said normal operations are expected to resume on Feb. 12. The plant, located in Grunhead, southeast of Berlin, is Tesla’s first in Europe. It opened in 2022 and employs 11,000 workers.
China’s market regulator said the recall was aimed at correcting software flaws in driver’s assistance systems, as well as in car door lock systems. The measure concerns two batches of cars produced between 2014 and 2023 and includes a total of 1.6 million Model S vehicles.
Tesla stock is falling due to the electric car boom
Tesla stock is falling US electric vehicle market continues to grow although many headlines suggest the opposite. In the fourth quarter, sales of battery-full electric vehicles increased by 29% compared to sales in the fourth quarter of 2022. Compared to the fourth quarter of 2021, sales increased by 122%.
The market continues to diversify as well, with more electric models joining the market every quarter. In fact, every quarter in the past two years since the fourth quarter of 2021 included at least one new model of battery-powered electric vehicles.
Some are more popular than others, and despite all this growth and expansion, Tesla continues to dominate the market. In the fourth quarter of 2023, Tesla accounted for 56% of the country’s total electric vehicle sales.
The model that has been the biggest driver of growth in the past few years by far was the Tesla Model Y. Next, Chevy Bolt, Ford F-150 Lightning, Rivian, Hyundai IONIQ 5, Volkswagen ID. 4 were great growth engines. If you add the sales volume growth for all these models together for the fourth quarter of 2023 compared to the fourth quarter of 2021, you have contributed to slightly larger volume growth than the Model Y.
If you look at the brand’s share of the US electric vehicle market in the fourth quarter, you’ll already find that Ford, Rivian, Mercedes, Chevy, Hyundai, and Volkswagen are the ones that follow Tesla as the market leaders, in that order. Looking at car groups instead, the leaders are Tesla, Ford, General Motors, Volkswagen Group, Hyundai-Kia, Rivian, and Mercedes in that order
