Tesla stock advanced Tuesday as weekly China vehicle registration data show an initial sales boost for the global EV giant after it slashed China prices during the first week of January.
Tesla China EV registrations were 12,654 for in the week of Jan. 9-15, up 500% compared to the 2,110 in the prior week. Overall sales of all passenger cars in China came in at 437,700 units in the week. That is down 14% compared to last year and up 50.5% compared to the previous week.
Tesla's China competitor BYD continued to lead the field of automakers with 40,420 registrations. EV startups Li Auto and Nio and XPeng sold 4,527, 2,974 and 1,817 respectively on the week.
XPeng, which competes in the same price segments as Tesla, cut prices on most of its models early Tuesday. That follows a similar move by Huawei-backed Aito.
Tesla stock shot up 7.4% to 131.44 Tuesday during market trading. TSLA shares rallied 8.3% last week, continuing a bounce from the Jan. 6 bear market low of 101.81. A number of analysts have also weighed in on Tesla stock, cutting price targets.
Tesla Price Cuts
The most recent registration numbers appear to reflects some benefit from Tesla's Jan. 6 decision to cut prices in China. Tesla slashed prices for the Model 3 and Y in China, with the base Model 3 cut more than 13% to $33,570. Local media reports in China suggested Tesla had received 30,000 orders within three days of the announced cuts, according to CnEVPost.
But will the demand boost last? Tesla Shanghai exports, the upcoming Chinese New Year holidays — including another Shanghai plant shutdown — as well as the ongoing Covid wave may mean that it's several weeks before there's a clear sense of Tesla's local demand.
On Friday, Tesla also announced big price cuts in the U.S. and Europe. Tesla stock closed modestly lower Friday even as the price cuts made more of the company's models eligible for tax incentives of $7,500 under the Inflation Reduction Act (IRA).
On Tuesday, Wells Fargo analyst Colin Langan told investors that Tesla's price cuts could put the entire auto industry under pressure to respond. Langan believes the cuts will likely draw buyers that previous have not considered Tesla.
Meanwhile, Bank of America analysts John Murphy Tuesday lowered the firm's price target on Tesla stock to 130, down from 135. Murphy maintained a "neutral" rating on TSLA shares.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
