Tesla discounted vehicles, stocks crashed

Shares of Tesla fell sharply in early trading today after the company lowered the price of some of its cars in China. Shares of the electric carmaker fell nearly 3 percent before intraday trading.

Tesla, one of the world’s largest electric car makers, has reduced the price of Model 3 and Model Y vehicles in China, one of the company’s most critical markets.

9 PERCENT OFF

The company cut the starting price of the Model 3 Sedan from 279,900 yuan ($38,538) to 265,900 yuan ($36,615). The price of the Model Y sporty off-road vehicle was reduced from 316,900 yuan to 288,900 yuan. Thus, prices have been reduced by around 9 percent.

By lowering vehicle prices, Tesla partially reversed hikes it made in China and the US earlier this year. The increases were due to higher raw material costs. The latest discounts came after Tesla CEO Elon Musk warned of a downturn for the Chinese economy.

OBJECTIVE TO INCREASE DEMAND

Musk stated in March that his company was experiencing inflationary pressures in raw materials and logistics. The famous CEO warned last week that “China is experiencing some kind of recession, mainly in real estate markets.” The price cuts at Tesla are believed to be aimed at boosting demand due to the stagnant Chinese economy.

Tesla also offered insurance incentives last month to boost vehicle sales. The Tesla CEO also said in a previous interview that they are working on a $25,000 Tesla model. .

THE EXCHANGE HAS FALLEN STRONG

Tesla shares suffered from sharp declines in global stock markets, especially US stock markets, and speculation that Musk would take over Twitter also hurt the company’s stock market performance.

The company’s share of the New York Stock Exchange has lost 46 percent since the beginning of the year.