Tesla stock falls on 70% sales plunge in China

In the world’s largest automobile market, China, Tesla (TSLA) managed to sell only 211 cars in October, Reuters reported on Tuesday quoting sources from China’s passenger car association.

Shares of the company opened 1.7% lower on Tuesday. As of 10:35 AM ET, the stock was down 2.6%.

The sales figure marks a 70% decline from last year, underscoring the impact of the US-China trade war on electric car maker. China had in July raised its tariffs on US auto imports to 40%, further weighing on the margins of the company.

A spokesperson of Tesla told CNBC, “This is wildly inaccurate. While we do not disclose regional or monthly sales numbers, these figures are off by a significant margin.”

While CEO Elon Musk had earlier expressed his desire to reduce the prices of Tesla vehicles in China, such a move would badly hurt the cash-strapped company as long as it imports vehicles to the Asian market. Such a move might now be halted till the factory in Shanghai is up and running.

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Last month, Tesla reported third-quarter results that smashed past estimates, with automobile revenues soaring 158%, primarily driven by higher Model 3 deliveries. The company also achieved profitability as promised by Musk, though a few critics have stated that this was the peak for the company.

TSLA shares have strictly traded sideways so far this year and are currently up 6%.

 

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