What happened to the Tesla's China customers who opt to buy an inventory car, which received a discount of 6,000 yen $860 a month, according to a company representative.
The latest price moves came after a price reduction of up to 9% announced by Tesla in late October. The company was followed by another price adjustment in early November when it announced a 4,000-yuan insurance subsidy reduction.
The build-to-order model is followed by Tesla and most of its Chinese rivals. Only if orders are canceled or if the companies are overproduced, they will be left with unold inventories, CnEVPost reported.
Why It is Important: A Reuters report said this week that Tesla is reducing the production of Model Y vehicles at Giga Shanghai plant by 20% in December. This was later denied by the company.
The belief that demand might be slowing in China was supported by the successive price cuts. Piper Sandler analyst Alexander Potter said he expects further price cuts from Tesla to make its vehicles affordable.
He said there was the possibility that the company would run out of buyers in the $50,000 price points due to the shaky macroeconomic situation and ongoing COVID 19 disruptions.
According to Benzinga Pro data, Tesla closed Tuesday's session 1.44% lower at $179.82.
See also: Elon Musk's Call For 'Epic' Q 4 At Risk As Tesla Trims China-Made Model Y Production In Dec By 20%