The electric-vehicle maker on Wednesday reported lower-than-anticipated earnings after price cuts that had hit margins. Tesla shares were down about 5% in Thursday’s premarket, after having already declined about 5% in regular trading hours Wednesday.
That stock drop seemed to spread to Tesla’s Chinese rivals. In Hong Kong trading Thursday, BYD closed 3.7% lower. Li Auto and Geely posted similar declines. Xpeng and Nio finished down 9% and 8%, respectively. Tesla’s U.S. competitors met a similar fate. Rivian and Lucid each dropped about 9% on Wednesday and were heading even lower in the premarket.
The worry is that the EV price war is getting more serious and is going to hurt everyone in the market. While Tesla still boasts a healthy profit margin, others are selling their cars at a loss. They still need to ramp up production and efficiency before they can actually start making money on sales.
Tesla CEO Elon Musk said deliveries of the new Cybertruck won’t significantly contribute to profits until 2025. He complained about everything from interest rates to the company’s growth on a call with investors Wednesday afternoon, arguing that the trading environment is difficult.Write to Brian Swint at brian.swint@barrons.com