Investors may be wondering, ‘Is Tesla a good stock to buy in the current climate ?’. Tesla’s stock has been suffering as of late due to investors becoming anxious over recent developments. The main issue is the slashing of prices in the Chinese market. These discounts keep surmounting; the company has made two cuts in the last week alone. There has been a problem with price wars in this market. Electronic vehicles keep becoming cheaper. Elon Musk will have to price his products competitively if he wants to survive. This has been an ongoing trend in this specific market.
For one example, Tesla has reduced the price of its Model S luxury sedan. The price of the model had originally been 808,900 yuan and has dropped to 754,900 yuan. That’s roughly a 7% drop. Another example is the Model X SUV dropping from 898,900 yuan to 836,900. Another 7% drop.
Shortly before this latest move, Tesla had been reducing prices for their Model 3 and Model Y Tesla vehicles, leaving investors wondering if the stock prices will go up. Not only that, they had begun subsidising their insurance politics for customers. The combination of all these latest changes has understandably had investors spooked.
Tesla Stock Analysis
Tesla stocks (TSLA) have dropped over 6% in the last 5 days alone. This is a rather worrying trend for the car company. Those considering buying stocks in Tesla may think twice.
Analysts have identified definite signs of a price war taking place. Other companies had already started their price cuts in this last month before Tesla. Nine different automatic vehicle producers have already cut the prices of 23 models in total.
It was Tesla which had originally started this trend. They were already reducing prices across global prices towards the start of 2023. At a rapid pace as well. It has been doing this in the US market as well. It remains to be seen if Tesla is a good stock to buy after this price war is over and if the Tesla stock will go up.
Other EV producers have also suffered. Many stocks are down in the Chinese market especially. This includes the likes of NIO, Xpeng, Li auto, and BYD, which have all come down lower.
