Global auto stocks sell off as Tesla cuts car prices

Shares of automakers in China and Europe fell after Tesla repeatedly cut car prices in these two markets.

On the Hong Kong Stock Exchange, shares of Chinese electric car maker NIO fell 9.6% today. This stock has lost 33% since the beginning of the year. Shares of another electric car maker, XPeng, fell 9.9%, while Zhejiang Leapmotor Technology fell 5.1%.

In Europe, Volkswagen shares also fell 2.1% this afternoon. Stellantis and Mercedes-Benz lost more than 1%. Renault and BMW fell more than 2%.

Kelvin Lau, an analyst at Daiwa Capital Markets, said Tesla’s recent price cuts have affected the overall sentiment of the auto industry. The price pressure, combined with Chinese electric car makers’ disappointing January sales, has sparked a sell-off in the industry.

Model Y cars at Tesla's factory in Gruenheide (Germany). Photo: Reuters

On January 17, electric car maker Tesla announced a price cut of 5,000 euros ($5,439) for two versions of the Model Y in Germany. After the reduction, the Performance version is now 55,990 euros and the Long Range version is now 49,990 euros. The standard Model Y is also reduced by 1,900 euros, down to 42,990.

In France, the company also reduced the price of the Model Y by 6.7%. In Denmark, the reduction was as high as 10.8%. Tesla prices in the Netherlands and Norway were also reduced.

Last weekend, the American electric carmaker also reduced the price of its Model 3 in the Chinese market by 6%, to 245,900 yuan ($34,291). The Model Y here also has a starting price of 258,900 yuan, down from 266,400 yuan previously.

HSBC said fierce competition and weak demand could put pressure on car prices in Europe this year. Tesla’s sales in Germany rose 2.2% last year, but fell 77% in December alone. Tesla shares fell 2% on Jan. 17 after the price cut announcement.

Citi data also shows that NIO sales fell 27% month-on-month this month. XPeng fell 62% and Leapmotor fell 30%. China’s EV sales could fall 30% in January compared to the previous month, Citi forecasts. Tesla’s price cuts in China will add to the pressure on XPeng, as the two operate in the same segment.

Ha Thu (according to Reuters)

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