Elon Musk's Tesla drops after Model 3, Y price cuts in China
Tesla's Model 3 and Y in China start at 265,900 and 288,900 Chinese yuan, respectively.
Wedbush Securities managing director Dan Ives tells 'Varney & Co.' why he tempered Tesla expectations for Q4 and cut his price target.
Tesla has cut the starting prices of its Model 3 and Model Y vehicles in China.
Tesla China-made Model 3 vehicles are seen during a delivery event at its factory in Shanghai, China Jan. 7, 2020.
Model Y cars are pictured during the opening ceremony of the new Tesla Gigafactory for electric cars in Gruenheide, Germany, Mar. 22, 2022.
A Model 3 sedan in China now starts at 265,900 Chinese Yuan ($38,695), down from 279,900 yuan. Meanwhile, the Model Y sport utility vehicle now starts at 288,900 Yuan ($39,939), down from previous starting price of 316,900 yuan.
In March, Tesla CEO Elon Musk tweeted that the electric vehicle maker and his aerospace company SpaceX were experiencing "significant" inflationary pressure in raw materials and logistics. Since then, Tesla has raised its car prices, citing inflation and global supply chain challenges.
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The latest price hike comes after Musk warned during the company's third quarter earnings call last week that demand is "a little harder than it otherwise would be" due to a "recession of sorts" in China and Europe driven by a softening property market and energy prices, respectively.
"North America is in pretty good health," he added. "Although the Fed [Federal Reserve] is raising interest rates more than they should, but I think they'll eventually realize that and bring it back down again."
Despite the challenges, Musk said Tesla is "extremely confident of a great Q4 [fourth quarter]" and anticipates continued growth in its vehicle production sales and deliveries.
Tesla Model Y and Model 3 electric vehicles, which will be sent to the Port of Zeebrugge in Belgium, wait to be loaded on board the roll-on-roll-off cargo vessel Theben operated by Wallenius Wilhelmsen at Nangang port on May 15, 2022 in Shanghai, China. y Shen Chunchen/VCG via Getty Images)
Tesla Model Y and Model 3 electric vehicles, which will be sent to the Port of Zeebrugge in Belgium, wait to be loaded on board the roll-on-roll-off cargo vessel Theben operated by Wallenius Wilhelmsen at Nangang port on May 15, 2022 in Shanghai, China.
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Tesla produced a total of 365,923 vehicles and delivered a total of 343,830 vehicles during the third quarter of 2022. The Model Y and 3 and accounted for 345,988 vehicles produced and 325,158 deliveries during the quarter.
According to China's Passenger Car Association, Tesla delivered 83,135 electric vehicles made in its Shanghai factory, surpassing previous quarterly records but trailing behind Chinese competitor BYD's nearly 95,000 units.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 355.50 | +15.86 | +4.67% |
| BYDDY | BYD CO. LTD. | 66.44 | -1.19 | -1.76% |
Tesla slid more than 7% at one point during Monday's trading session. Tesla stock is down approximately 48% year to date.