Tesla (TSLA) shares are climbing higher today despite a mixed slew of news out of one of its most important markets, China.
Reports over the weekend detail a number of protests at Tesla showrooms, as recent Tesla buyers complained about the automaker’s decision to cut prices on Friday. The price cut was the second decrease in the past three months, as Tesla tries to boost demand in the competitive Chinese market. Reuters reports Tesla also cut prices in Australia, Japan, and South Korea.
Recent owners demanded Tesla issue rebates and credits for purchases made right before the announcement of the price cuts on Friday. The new price cuts saw the Chinese-made Model 3 fall by 13.5%, which now starts at $33,515, and the Model Y cut by 10%, which now starts at $37,899.
Many of the owners had apparently purchased cars just before the end of 2022 in order to take advantage of expiring government subsidies for EVs. Owners complained that they had essentially overpaid for the cars.
Videos of the protests were taken at locations in Shanghai, Beijing, and Chengdu, among others, with protesters in Chengdu reportedly shouting, "Return the money, refund our cars."
At the moment it seems new owners in China will not get any relief, as a Tesla China spokesperson told Reuters the company is not planning to compensate new buyers who took delivery before Friday’s price cut.
In addition to prompting protests, the price cuts are apparently driving new demand for its vehicles.
Tesla’s China website shows waiting times for both the rear-wheel drive and long-range versions of the Model Y are both a week longer after the price cuts.
The delivery wait time for both of those Model Y versions was pushed to two to five weeks. However, the wait time for all Model 3 versions and the Model Y performance edition remained at one to four weeks.
Note that these extended wait times for those two versions of the Model Y come as Tesla plans an extended break at its Giga Shanghai for Chinese New Year. Tesla will suspend production starting on January 20th through the 31st for the holiday.
Though the extended wait times in China are seen as a bullish sign on the street, only a few days ago Wedbush analyst Dan Ives predicted more price cuts in China would be needed in order to boost demand.
“The major worry now overhead for Tesla is that the demand story especially out of China is showing heavy cracks in the armor at a time that EV competition is steadily increasing domestically with NIO, BYD, Xpeng, and others fighting for a smaller pie with the Chinese consumer weakening,” Ives wrote on January 4th. “With China representing 40%+ of the global growth story for Tesla this is a heavy concern for the Street which will likely result in more significant price cuts over the coming months to spur demand as a potential pricing war takes place to gain market share in a darker macro backdrop.”
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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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