Tesla Falls After Reports of Plummeting Automobile Sales In China


Tesla, Inc. (NASDAQ: TSLA)

Shares of Tesla lost as much as 2.51% in the early hours of the regular session on Tuesday, trading near $338 per share.

The drop came after Reuters published a report saying the electric-car maker experienced a sales decline of 70% year over year in China during the month of October amid heated trade disagreements between Washington and Beijing.

An official of the China Passenger Car Association told Reuters that Tesla only managed to sell a total of 211 vehicles last month. The decline underscores the impact of the ongoing Sino-U.S. trade war on the electric car maker considering that China is the largest auto market in the world.

In July, the country raised its tariffs on auto products coming from the U.S. to 40%, a move that appears to be hurting the margins of Tesla. The tariffs are making its vehicles less affordable in China prompting the company to cut prices of its Model X and Model S cars by 12 to 26 percent to win a share of the auto market in the country.

A spokesperson of the Palo Alto-based firm blasted the report saying, “This is wildly inaccurate. While we do not disclose regional or monthly sales numbers, these figures are off by a significant margin.”

Last month, Tesla stunned Wall Street after reporting a record third-quarter profit that edged above the expectations of analysts. Higher Model 3 deliveries helped push revenues from its automotive segment to 158% from the same period a year ago.

A few critics say that the company might never be able to achieve that milestone again, but Mr. Musk believes it is destined for greater achievements. Some investors are also concerned about a slew of debt bills the company is expected to settle in the coming months. Tesla had only posted a quarterly profit in 2013 and 2016, since going public eight years ago

Tesla, Inc. Company Profile

Tesla, Inc. engages in the design, development, manufacture, and sale of fully electric vehicles, energy generation and storage systems. It also provides vehicle service centers, supercharger station, and self-driving capability.

The firm operates through Automotive, and Energy Generation and Storage segments. The Automotive segment includes the design, development, manufacture, and sale of electric vehicles.

The Energy Generation and Storage segment includes the design, manufacture, installation, sale, and lease of stationary energy storage products and solar energy systems, and sale of electricity generated by its solar energy systems to customers.

The company was founded by Jeffrey B. Straubel, Elon Reeve Musk, Martin Eberhard, and Marc Tarpenning on July 1, 2003, and is headquartered in Palo Alto, CA. – CNN Money