Tesla Reduces Prices for Model 3 and Model Y in Strong Market

Tesla Reduces Prices — Tesla (TSLA) has officially announced a reduction in prices for the Model 3 and two variants of the Model Y in China. The electric vehicle (EV) giant’s stock experienced a decline on Friday, extending a recent pullback.

The Model 3 Rear Wheel Drive is now priced at RMB 245,900 ($34,639), marking a 5.9% decrease from its previous RMB 261,400 ($36,822). The Model 3 All Wheel Drive sees a 3.9% reduction to RMB 285,900 from RMB 297,400.

Understanding Tesla Reduces Prices

In the case of the Model Y, the Rear Wheel Drive version is subject to a 2.8% price cut, now listed at RMB 258,900 instead of RMB 266,400. The Model Y LR sees a 2.1% decrease to RMB 299,900 from RMB 306,400.

Notably, Tesla has maintained the price of the Model Y Performance in China at RMB 363,900.

Key Facts and Analysis

The majority of Tesla sales in China are attributed to the base Model Y. Interestingly, Tesla has reportedly ceased offering an insurance subsidy of RMB 6,000 on Model 3 inventory vehicles.

Despite robust sales in China throughout 2023, reaching a new record in the fourth quarter, Tesla faces intense competition in the highly competitive Chinese market. Rivals continuously introduce new models featuring advanced technology and competitive pricing. Li Auto (LI) has also announced substantial price reductions for its lineup ahead of an expected facelift for existing models in March. However, Li Auto is also grappling with competition from Huawei-backed Aito and other players.

Tesla Stock Movement:
Tesla stock witnessed a 3.7% decline, closing at 218.89, extending its weekly loss to 7.8%. This decrease followed a 2.9% dip on Thursday amid various headlines. TSLA stock breached its 200-day line for the first time since Nov. 13.

While Tesla stock still holds a 278.98 buy point from a double-bottom base, the pattern is exhibiting increasing complexity. Li Auto stock also experienced a 4.15% decline, nearly reaching its October low.

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