Chinese EV stocks sink tracking Tesla as price war heats up By Investing.com

by Ambar Warrick

Investing.com – Shares of major Chinese electric vehicle (EV) makers and battery producers fell on Thursday, tracking sharp losses overnight in Tesla Inc (NASDAQ:) after the company’s quarterly results missed estimates following a series of steep price cuts this year. general.

Hong Kong-listed shares of Li Auto Inc (HK:) (NASDAQ:) , BYD Co Ltd (HK:) , NIO Corporation (HK:) (NYSE:), and XPeng Inc (HK::) (NYSE:) fell between 0.5% and 7%, with XPeng losing the most of its peers.

Shenzhen-listed shares in Contemporary Amperex Technology Co Ltd (SZ:) (CATL), a major supplier of batteries to Tesla, also lost 2.3%.

The losses in Asian stocks came after Tesla sank about 6% in after-hours trading, after the company cut the prices of its cars at least six times this year.

CEO Elon Musk also doubled down on price cuts, indicating that the electric car maker will prioritize sales growth over profit in the deteriorating economic conditions. The move represents an escalation in Tesla’s bitter price war to grab market share from the longtime automaker in the United States, while also looking to expand its presence in China, its largest market.

Tesla’s discount wave began in China, where it sought to compete with much cheaper and more competitive offerings from its domestic peers. But that called for similar price cuts from Chinese electric car makers, which analysts warned could dampen the industry’s profitability.

XPeng founder He Xiaopeng warned that increased competition could lead to the removal of some domestic players. Analysts have also warned that Tesla will likely have to cut prices further in order to appear more competitive.

Tesla’s Chinese competitors also unveiled a slew of lower-cost models this week, with plans to capture export markets in Asia, the United States and Europe. Warren Buffett-backed China’s largest maker of electric vehicles, BYD, unveiled its “Seagull” budget model at the Shanghai Auto Show, with a retail price of around $11,000 — a fraction of the prices charged by other manufacturers.

Data this week showed that sales of electric cars in China are up about 30% so far this year, also boosted by pent-up demand after the country eased most anti-COVID measures at the start of 2023.