Investing.com-- Shares of Chinese electric vehicle makers fell on Tuesday, tracking an overnight slide in Tesla Inc (NASDAQ:TSLA) after the world’s most valuable EV firm clocked a sharp sales decline in China.
Shares of BYD (SZ:002594) Co Ltd (HK:1211), NIO Inc (HK:9866), Xpeng (NYSE:XPEV) Inc (HK:9868) and Li Auto (NASDAQ:LI) Inc (HK:2015) slid between 1% to 5% in Hong Kong trade, dragging the broader Hang Seng index down 2.5%.
Losses came tracking a 7.2% tumble in Tesla, after the firm said its Chinese sales declined in February, despite increased consumer spending during the Lunar New Year holiday.
Tesla marked a 19% year-on-year decline in sales of China-made vehicles, which fell to their lowest level since December 2022. The drop came as the firm engaged in a bitter price war with its Chinese peers to capture the world’s largest EV market.
But declining sales may now indicate slowing demand in China, especially as the country grapples with a bleak economic outlook.
Weakening sales also bring up the prospect of more price cuts in the country- a trend that bodes poorly for all EV players in China, given that it has eaten into most of their profit margins.
BYD had overtaken Tesla as the best-selling EV maker in December, with the firm seemingly commanding a much stronger sales presence in its home market. BYD’s shares fell the least among its peers on Tuesday.
The firm had on Monday launched a new version of its best-selling car at a lower price than the older model, likely escalating a price war with its peers. BYD’s February sales also fell 37%, but remained well ahead of Tesla by overall volume.