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Tesla price cuts work. The company sells more cars.
Sam Yeh/AFP via Getty Images
Investors can see the positive impact of Teslathe price of the car cutbacks on me
It
Stocks – Now research shows that move has boosted sales and market share.
Tesla
(Stock ticker: TSLA) China recently cut auto prices on January 6th. So, the Wedbush Analyst Dan Ives conducted a survey of 500 Chinese electric vehicle buyers in mainland China to measure the impact of the cuts.
Our survey found that 76% of Chinese consumers of electric vehicles would consider buying a Tesla in 2023, with local competitors as close as possible.
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(1211. Hong Kong) followed in second place
nio
(
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) in third place,” Ives wrote in a research report.
Tesla’s market share in China’s battery electric vehicle sales ranges between 10% and 15%. The survey results point to some stock gains for Tesla after the company cut prices early in 2023.
“[The] The survey says about Tesla’s recent price cuts…[they’re a] Huge success story so far.” “Nearly 70% responded that recent price cuts had positively influenced their decision to likely buy a Tesla Y, proving that the price cuts were a local success out of the gates.”
There is other evidence that Chinese price cuts have had a positive effect.
City
analyst Jeff Chung Tracks weekly car insurance registrations in China. Approximately 13,000 Tesla cars were registered in the week following the January 6 price cuts, up from the previous week’s registrations of about 2,100 vehicles.
It’s still a little early to confirm how price cuts in the US will affect new car orders. Tesla cut prices in the US on January 12th. But why Tesla cut prices in the US seems obvious. Research firm YipitData found that orders for new Tesla cars in America fell sharply at the start of the year.
“December 2022 order trends benefited from discounts and supercharge incentives that required vehicle delivery before delivery. [the] “End of the year,” company spokeswoman Nico Wada said in an emailed statement. YipitData found that orders in the first week of January dropped nearly 75% compared to the last week of 2022.
The company had no results in the week following the sale. This data should be available soon and could shed light on how price cuts in the US affect buyer behavior in that country.
Early indications point to a similar reaction to price cuts in the US that Ives discovered in China. Edmunds, a provider of car and auto buying information, wrote that the Model Y became the most searched-for car on its website in the week following the sale. Y climbed 69 points. The Model 3 went on to be the 11th most searched, up 36 spots.
More buyer activity should lead to more sales. The Wall Street consensus for first-quarter deliveries is now about 445,000 vehicles, up from about 438,000 at the start of January, according to FactSet.
However, lower prices have led to lower earnings estimates. Wall Street’s 2023 EPS estimate is now around $4.80, down from about $5.50 at the start of the year.
As Friday trading approaches, Tesla stock is up 15% since announcing price cuts in China. the
It’s up about 5% over the same period.
Tesla stock rose 3.1% on Friday. the
0.8% gain, and
It was up 0.5%.
Prices for Ives buy Tesla shares. His price target for the shares is $175. Overall, about 64% of analysts who cover shares buy Tesla’s stock price. the an average The buy rating for stocks in the S&P 500 is around 58%. average analyst price target About $214 a share.
Citi’s Chung does not cover Tesla stock. Covers Chinese automakers.
Write to Al Root at [email protected]
“Infuriatingly humble alcohol fanatic. Unapologetic beer practitioner. Analyst.”