Tesla Price Cuts Send European, Chinese Auto Stocks Lower
January 17 2024 - 7:51AM
Dow Jones News
By Sherry Qin and David Sachs
Shares of European and Chinese automakers fell after Tesla
continued to cut prices, amid heightened global competition and
uncertain demand in the electric-vehicle market.
In Germany, the U.S. electric-car company slashed prices by
5,000 euros ($5,439) for two versions of its Model Y, according to
its website. The Performance model now costs German consumers
EUR55,990 while the Long Range model costs EUR49,990. Tesla also
cut the base Model Y price by EUR1,900 to EUR42,990.
At 1219 GMT, shares in Volkswagen were down 2.1%, Stellantis
dropped 1.1%, Renault was down 2%, Mercedes-Benz fell 1.7% and BMW
was down 2.4%.
Meanwhile in China, Tesla cut the price of its entry-level Model
3 by 5.9% to 245,900 yuan ($34,291) and lowered the Model Y's
starting price to CNY258,900 from CNY266,400 on Friday.
NIO shares fell 9.6% to 49.05 Hong Kong dollars ($6.27) on
Wednesday in Asia after ADRs shed 8.65% overnight. Its Hong
Kong-listed shares have lost 33% so far this year. XPeng dropped
9.9% and Zhejiang Leapmotor Technology declined 5.1%.
Tesla's recent price reductions have hurt overall sentiment in
the auto industry, Daiwa Capital Markets analyst Kelvin Lau said in
a research note. The pricing pressure, together with Chinese EV
makers' lackluster January sales so far, triggered the selloff, Lau
said.
Fiercer competition and flagging demand are expected to put
pressure on electric-vehicle pricing in Europe this year, HSBC
analysts said in a note last week.
Tesla sales rose 2.2% in Germany last year but fell 77% in
December, according to Kraftfahrt-Bundesamt, the federal motor
transport authority.
NIO's month-to-date insurance registrations, a gauge of retail
sales, have fallen 27% from the previous month, according to data
compiled by Citi. XPeng's insurance sales have dropped 62% so far,
while Leapmotor's has declined 30%. China's EV sales could fall 30%
in January from December, Citi analysts led by Jeff Chung said in a
note.
Tesla's price cut on models in the CNY200,000-CNY300,000 range,
where most of XPeng's products are positioned, could pose a threat
to the Chinese EV maker, the Citi analysts said in a separate note
recently.
Several investment banks, including Citi and HSBC Qianhai,
recently lowered their target prices on NIO's and XPeng's ADRs and
H shares, citing intense competition and pricing pressures.
Write to Sherry Qin at sherry.qin@wsj.com. Write to David Sachs
at david.sachs@wsj.com.
(END) Dow Jones Newswires
January 17, 2024 07:36 ET (12:36 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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