- Tesla (TSLA, $211.25) lost 2.5% in the premarket after cutting the price of the Model 3 and Model Y in China by up to 9%.
- The price drops take place as China's demand seems to be declining. But, pressure has also been placed on Chinese tech equities and the sector as a whole following President Xi's election to a third term in power.
- The stock prices of Chinese EV producers are also being impacted; Nio (NIO, $9.45), XPeng (XPEV, $7.16), and Li Auto (LI, $14.68) each had losses of 10.3%, 11.3%, and 10.3%, respectively. Additionally, US-listed companies JD.com (JD, $36.66), Baidu (BIDU, $79.75), and Tencent Music (TME, $3.64) also witnessed sharp falls in the premarket, losing 15.9%, 12.7%, and 11% respectively.
Why it matters
China has tightened regulations on the industry in areas like data privacy and how algorithms can be utilized thanks to policies put in place under Xi's leadership. Xi's "zero-Covid" policy has resulted in cities being closed down this year, including Shanghai, a major global financial center leading to Chinese digital giants Tencent and Alibaba losing billions of dollars in value.
