Tesla shares are in a slump as the automaker continues to reduce prices in China’s increasingly competitive electric car market.
Model Y is made in China and will cost 43% less than the US for consumers who purchase it.
The share price of the company plunged as much as 4pc during early trading, plunging 37pc by December, and falling 65pc by 2022. These were its worst monthly or yearly performances.
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This is despite signs of declining prospects for Tesla China and Chief Executive Elon Musk’s obsession with Twitter since he took over the social media network in November.
Chris McNally, an Evercore ISI analyst said that “This time it is serious.”
According to the China website, Tesla’s Model Y, a Chinese-built sport utility vehicle, has dropped 10% to a starting price of 259,900 yuan (£31.891) today.
The standard rear-wheel-drive version of the Model Y is 43pc cheaper than the all-wheel-drive model.
Today’s price reduction brings the Model 3 down to 229,900 Yuan (from 265,900 Yuan), which is about 30% less than the US.
Tesla already reduced China’s prices last year in an effort to increase sales. This is in response to increased competition in the premium and mass segments.
