Tesla stocks drop as China sales hit yearly low

Tesla shares plunged over 7% on Monday due to a slump in February sales in China, possibly influenced by Lunar New Year festivities, denting its global delivery prospects. This decline in its pivotal market comes amidst increased competition and demand challenges. In February 2024, Tesla's China-made vehicle sales plummeted 19% year-on-year to 60,365 units, the lowest since December 2022. These vehicles, produced in Tesla's Shanghai factory, cater to local, European, and other global markets, comprising over half of Tesla's worldwide deliveries last year. Closing at $188.14, Tesla shares have dropped 24% since the year's outset. Lunar New Year festivities in February dampened car sales, prompting Tesla to introduce price cuts and incentives to counter slowing demand and Chinese rivals like BYD, an automotive company. Wedbush analyst Dan Ives remarked, It's been a perfect storm of headwinds for Tesla in China, as the company unveiled new incentives, including insurance subsidies, to allure consumers in the world's largest auto market. BYD, Tesla's Chinese competitor, launched a new car version at a lower price than its predecessor, escalating the price war. In the U.S., Tesla offered 5,000 free Supercharging miles for customers trading old vehicles for new ones by March 31. Analyst Troy Teslike revised Tesla's global delivery forecast for Q1 due to weaker-than-expected China sales, hinting at a potential demand issue.