On Thursday, Tesla’s stock price plummeted 5.61% on the New York Stock Exchange, closing at $263.45 after the company announced price cuts in China to boost lagging sales.
Tesla CEO Elon Musk revealed plans to offer an 8,000 yuan (approximately $1,104) subsidy for Model 3 buyers in China.
Tesla’s February sales in China plunged to just over 30,000 units, marking a 49% year-over-year decline and a 51% drop from the previous month.
In stark contrast, rival automaker BYD reported a 90% increase compared to last year. Faced with fierce competition and sluggish sales in the Chinese market, Tesla appears to have reluctantly resorted to price cuts, which have inevitably eaten into profit margins and driven stock price declines.
Following this latest slump, Tesla’s stock has fallen 34.76% year-to-date and 43% from its all-time high. Consequently, the company’s market capitalization has shrunk to $847.3 billion, pushing it down to 9th place in the global rankings.