Tesla stock fell as much as 7% Monday morning after the company reduced the price of some of its vehicles in China. At market close, they were down more than 1%.
Tesla has reduced the cost of its Model 3 and Model Y vehicles in China, one of the company's most important markets.
The Model 3 sedan's starting price has been reduced from 279,900 yuan to 265,900 yuan ($36,615). The Model Y sports utility vehicle now costs 288,900 yuan, down from 316,900 yuan previously.
Tesla shares closed down 1% after Elon Musk’s EV firm cuts price of cars in China
Tesla's price cuts partially reverse some of the price increases that the company was forced to implement earlier this year in China and the United States due to rising raw material costs.
The price cuts also come after Musk stated that he sees signs of a Chinese recession.
“China is experiencing a sort of recession,” Musk said last week, referring primarily to the real estate market.
Tesla delivered 343,000 vehicles in the fiscal quarter that ended September 30, falling short of analyst expectations. The number of cars delivered in China is not disclosed by the company. Tesla also fell short of analyst revenue expectations in the third quarter.
However, the China Passenger Car Association reported that Tesla delivered 83,135 China-made electric vehicles in September, setting a monthly record for the company. Tesla operates a massive Gigafactory in the Chinese city of Shanghai, which it upgraded earlier this year.
