Tesla stock tumbles 7% as shipments slump, new price cuts announced in China

Tesla (TSLA) shares dropped to new multi-week lows as slowing China shipments and new price cuts there hint at troubles for the EV stalwart in the world’s largest car market.

Tesla reported 60,365 vehicle shipments from its Giga Shanghai factory in February, according to preliminary data from China’s PCA (Passenger Car Association) via Bloomberg. The February shipments represent a 16% drop from a month ago, a 19% drop from a year ago, and the lowest shipment total since December 2022.

Tesla shares closed down 7.16%, its lowest close since Feb. 13.

The Chinese Lunar Holiday, during which the country shuts down for nearly two weeks, fell in February of this year. Historically, this has led to depressed economic activity and sales in the country. In addition, Tesla uses earlier months in the quarter to fulfill shipments outside of China and generally ramps up shipments later in the quarter for China domestic sales.

But Tesla’s lowest shipment total in over a year is a concern for the company, which sees China as a huge growth market. Even China’s BYD, which surpassed Tesla in overall EV sales in Q4 and generally dominates the Chinese EV market, saw its February sales tumble to 122,311 units from 193,655, a 37% drop.

China now sells the most EVs in the world, but a recent slowdown in demand for EVs has led automakers there to engage in another price war earlier this year — and this includes Tesla.

According to a report from Deutsche Bank’s Emmanuel Rosner published 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.” Rosner said the new incentives include insurance discounts, discounts on paint changes, and preferential financing plans on…