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Tesla Inc. (NASDAQ:TSLA) is handing out further incentives to China buyers as the country grapples with the impact of on-and-off recurrences of COVID-19.
What Happened: Tesla’s China customers who opt to buy an inventory car would receive a discount of 6,000 yen ($860), Reuters reported, citing a company representative.
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The latest price moves come after a price reduction of up to 9% announced by Tesla in late October. The company followed it up with another price adjustment in early November when it announced a 4,000-yuan insurance subsidy reduction.
See Also: Best China Stocks
Tesla and most of its Chinese rivals follow a build-to-order model. So, only when orders are canceled or if the companies overproduce, they will be left with unsold inventories, CnEVPost reported.
Why It’s Important: A Reuters report said this week, citing sources, that Tesla is reducing the production of Model Y vehicles at Giga Shanghai plant by 20% in December. This was later denied by the company.
The successive price cuts, however, lent credence to the theory that demand might be slowing in China. Piper Sandler analyst Alexander Potter said in a recent note that he expects further price cuts by Tesla to make its vehicles affordable.
He sounded out the possibility of the company running out of buyers in the $50,000+ price points amid the shaky macroeconomic situation and the ongoing COVID-19 disruptions.
Tesla closed Tuesday's session 1.44% lower at $179.82, according to Benzinga Pro data.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.