Elon Musk's Tesla slashes car prices by 9% in China as its economy struggles and buyers look like backing away
- Tesla has slashed the prices of its Model 3 and Model Y electric cars by as much as 9% in China.
- The EV maker's boss Elon Musk warned last week that China is already in a "recession of sorts".
Tesla has slashed the price of two of its cars in China, as concerns grow about a potential recession in the world's second-largest economy.
The US company cut the price of its Model 3 and Model Y electric vehicles by 9% on Monday, going by listings posted Monday to its China website.
The price reductions come after Tesla CEO Elon Musk pointed to an economic slowdown in China, speaking alongside the EV maker's disappointing earnings report last week.
"China is experiencing a recession of sorts," Musk said during a third-quarter earnings call Wednesday.
A crisis in China's property market and the hit to the economy from the return of Beijing's zero-COVID shutdowns have fanned fears of a recession there in recent months.
Official data released Monday showed China's GDP grew 3.9% year-on-year in the last quarter – putting it on track to be well short of Beijing's target of 5.5% growth this year.
Tesla's shares fell 3.25% in premarket trading Monday, as investors digested the China price cuts. The EV giant's stock fell after its third-quarter earnings report showed it had missed its deliveries and revenue targets, and it was down 3.4% at close Friday from before the update.
Musk has tried to downplay concerns that a softening of demand in China, Europe, and the US would lead to some buyers walking away from deals to buy highly-priced Tesla vehicles.
"I wouldn't say we're recession proof, but it's certainly recession resilient," he said Wednesday.
Tesla said that temporarily tightened supply chains led to it missing some of its third-quarter targets,. But it has struggled to convince some of Wall Street's top analysts that it won't suffer from a demand slowdown.
"The bullish narrative is clearly 'hitting a rough patch' as Tesla must now prove again to the Street that the robust growth story is running into a myriad of logistics issues as opposed to demand softening with EV competition coming from all angles around the globe," Wedbush analyst Dan Ives said Thursday.