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Tesla suppliers’ shares jump as electric automaker cuts prices for some models in China

Hong Kong, China, September 13, 2022. A red Tesla automotive drives past the Tesla showroom in Wanchai. (Photo: Marc Fernandes/NurPhoto via Getty Images)

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Tesla’s Chinese suppliers jumped after the electrical automotive maker slashed the costs of some models in China.

In Weibo postthe corporate said its Model 3 and Model Y vehicles in China will now be priced at 229,900 yuan (about US$33,374) and 259,900 yuan, respectively.

The latest prices are down 13% to 24% from 4 months ago, in keeping with Reuters calculations.

Shenzhen-listed shares of Chinese suppliers Tesla surged on optimism that a price cut could boost demand.

Anhui Shiny Electronic Technology shares closed 8.8% higher, while Hengdian Group DMEGC Magnetics gained nearly 9%. Zhejiang Chint Electrics closed up 7.92% and Shandong Jinjing Science & Tech gained over 6%.

Tesla previously slashed prices in China in late October in an effort to extend sales and competitive advantage against rivals, including BYDwhich recently exposed latest luxury models.

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Grace Tao, Tesla’s vp of foreign affairs in China, said wa Weibo post that recent price adjustments were geared toward increasing demand.

These measures “reply to the federal government’s call with practical measures to advertise economic development and encourage consumption,” Tao wrote.

Separately, the so-called China Passenger Car Association said on Thursday that December sales of cars made in China by Tesla fell to 55,796, the bottom level in five months.

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