Tesla drops as the EV maker cuts prices in the US and Europe, deepening the stock's rout
- Tesla shares fell Friday after the company cut prices on its electric vehicles in the US and in Europe.
- Tesla stock finished 2022 among the S&P 500's 10 biggest decliners.
Tesla shares were knocked lower Friday after price cuts on its electric vehicles emerged from the company, keeping pressure on the stock that was among the worst-hit during 2022's equity rout.
Price reductions ranged between 6% to 20% in the US for its Model 3 sedan, its Model Y SUV and various performance models, according to its website listings. Tesla also reduced prices in European markets including Germany and France.
The stock fell 6.3% to $115.83 in premarket trade with more than 7 million shares exchanging hands, paring the loss to about 5% as regular trading got underway. The stock slid 64% in 2022, landing within the S&P 500's top 10 largest percentage decliners.
Tesla's moves in the US and in Europe follow recent price cuts in China and other markets in Asia aimed at bolstering sales.
"It's no secret that demand for Tesla is starting to see some cracks in this global slowdown for 2023," Wedbush analyst Dan Ives said in a note to clients Friday. "While the initial reaction to these cuts will naturally be negative on the Street at first, we believe this was the right strategic poker move by Musk & Co. at the right time," he said, referring to Tesla CEO Elon Musk.
Tesla in 2022 delivered a record 1.3 million EVs but fourth-quarter deliveries fell short of market expectations. Investors and analysts including Ives at Wedbush have voiced concern that Musk has been too focused on his $44 billion acquisition of Twitter at Tesla's expense. Musk himself has pushed back on that view, blaming the Federal Reserve's aggressive interest rate hikes for sinking Tesla's valuation.
Tesla's market cap dropped by more than $690 billion in 2022.