Tesla stock tumbles after company cuts prices in China

Tesla (TSLA) stock was falling early Friday after the company cut the price on two of its models in China, the automaker’s second cut in three months as it battles waning demand in the country.

Tesla cut prices on its China Model 3 by 13.5%, which now starts at $33,515, and its Model Y by 10%, which now starts at $37,899, according to calculations from Reuters.

Shares of the company fell as much as 7% in pre-market trading on Friday following the news, setting a new 52-week low for the automaker. Near 9:05 a.m. ET, the stock had pared losses and was off closer to 6.5%.

Tesla stock has now fallen more than 40% over the last month and remains at its lowest level since August 2020.

Future Fund managing partner Gary Black noted on Twitter early Friday some Wall Street analysts had already been expecting some price cuts, but said this move will still lead to “another round of 2023-2026 earnings cuts.”

Black noted the price cuts are needed to help prevent further market share loss for Tesla in China where BYD recently bested Tesla in 2022 year-end deliveries.

“Tesla’s price cuts intensify the need for Tesla to accelerate development of a $25K-$30K TSLA compact as a long-term China solution to combat BYD’s huge success in China’s under ¥200K segment,” Black wrote on Twitter. “The price cuts will act as a band aid until a $25K-$30K compact is ready.”

Tesla’s price cuts come just days after the company announced weaker-than-expected vehicle deliveries for the fourth…