Tesla falls 8% to new multiyear lows after the company slashed the price for its electric vehicles in China again
Reuters
- Tesla stock continued its slide on Friday, falling as much as 8% to hit its lowest level since August 2020.
- The decline came after the company lowered the price of its vehicles in China for the second time in less than three months.
- Concerns are growing that Tesla may be facing a shortfall in demand as the economy slows.
Tesla stock continued its downward trend and fell as much as 8% on Friday after the company slashed the prices of its electric vehicles in China.
The company discounted its cars by up to 14% for its Model 3 and Model Y, which are its two most popular vehicles. Prices for the more expensive Model S Plaid and Model X Plaid also came down.
This marks the second time in less than three months that Tesla lowered prices for Chinese buyers after 9% reductions on two of its cars in October.
The latest cuts come as investors grow concerned that the company is facing a broader shortfall in demand as the US economy starts to slow down due to high interest rates and inflation.
High rates certainly have not helped Tesla in the past year, as they make monthly payments more expensive for prospective buyers who utilize financing to complete their purchase. That's likely a big reason why CEO Elon Musk has urged the Federal Reserve to stop raising rates and instead cut them.
Friday's decline in Tesla sent the stock to its lowest level since August 12, 2020, trading just above the all important psychological level of $100 per share. Tesla pared its losses later in the trading session and was down just 3% to $107.
At its low on Friday, Tesla was 75% below its record high reached in November 2021. Since then, Tesla has erased nearly $900 billion in market value amid investor concerns about Musk's time commitment to Tesla and his other business ventures including SpaceX and Twitter.