Shares of Chinese electric vehicle manufacturers took a hit on Thursday 18th October 2023 after Tesla reported disappointing 3Q results on Wednesday 17th October 2023.
It was the first time Tesla, co-founded by Elon Musk, missed on both earnings and revenue since Q2 2019.
On Thursday morning, Hong Kong-listed shares of Chinese EV makers BYD and Xpeng fell approximately 2.18% and 8.76%. Li Auto slid 3.14%, while Nio and Geely dropped 8.36% and 3.97%.
Elon Musk reportedly cautioned that the Tesla Cybertruck, the electric full-size pickup truck model; would not deliver substantial positive cashflow for 12-18 months after production begins.
Musk reportedly said the company is working to bring down the prices of its cars amid high interest rates. ‘I’m worried about the high interest rate environment we’re in,’ he said, adding that it will be much harder for consumers to purchase cars if interest rates were to increase further.
Tesla shares down
Tesla shares closed 4.78% lower on Wednesday 17th October 2023. Other U.S. EV rivals Lucid and Rivian fell more than 9% on the same day. Lucid’s stock dropped a day earlier after it reported disappointing Q3 EV deliveries.
In the first six months of the year, BYD was the world’s top EV manufacturer, contributing 21% of global sales of EVs, according to research firm Canalys. Tesla trailed behind at second place with 15% market share while German carmaker Volkswagen held 7% market share in third place.
Price pressure
EV players are under pressure from a price war to gain market share amid intense competition.
Tesla introduced a number of price cuts over the last few months, especially in China – the world’s biggest EV market.
Rivals BYD, Nio, Li Auto and Xpeng have also joined Tesla in lowering the prices for some of their EV models.
Shares in BYD, (Build Your Dreams), jumped this week after it said it expected third-quarter profits to more than double compared with last year.
BYD is now ahead of Tesla in quarterly production – and second to the U.S. car maker in global sales.