Shares of EV makers Tesla (TSLA) and Li Auto (LI) are both declining in Monday's pre-market session — and into the market open — as both companies have begun to slash vehicle prices in Chinese markets yet again.

Yahoo Finance's Pras Subramanian reports on the latest round of EV price wars in China, also commenting on what could be expected in Tesla's first-quarter earnings set to report on Tuesday, April 23.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Luke Carberry Mogan.

Video Transcript

- Tesla shares falling again today after slashing prices of its Model 3 in China yet again here. The move from Tesla-led Chinese EV maker Li Auto to also cut prices on several of its models as the EV pricing war escalates. Shares of Li Auto also sinking this morning. Yahoo Finance's Pras Subramanian has the details. Hey, Pras.

PRAS SUBRAMANIAN: Hey, Brad. Yeah, man. So there's definitely some price action here in China, but also in the US, right. So you mentioned China up first. You had Model 3 going down to about $32,000 US. So it was a pretty big cut from 232,000 yuan to 246,000 yuan. So a big move there.

Also, the Model Y down to around 34,500 as well. A slight move down there. So you mentioned rival Li Auto also cutting prices. They're feeling yet that those concerns of a price floor that even the government was concerned about because of the fact that these companies were sort of raging at each other.

But also in the US, I want to note that the Model Y also went down by $2,000. The cheapest version now back down to 42,990. This is what it was before, before Tesla had hiked those prices shortly after Q1 ended. They also cut some of the higher trim level prices on the Model Y by $2,000 too. And the Model X also coming down.

So this is all coming after both the moves in China and the US after that disappointing Q1 delivery report. We also have earnings coming up tomorrow after the bell. Tesla is supposed to report a 40% drop in operating profit and its first revenue decline in four years, this according to Bloomberg.

- And Pras, when you take that into account and analysts note that you've been going through, what's the sentiment out there just in terms of how much is of that bad news has already been priced into the stock given that massive underperformance that we've seen in Tesla since the start of the year?

PRAS SUBRAMANIAN: , Yeah you would think that it has already been priced into the stock at this point. And I don't know if we're going to get much of a surprise there from their forward guidance because they've been very kind of not so consistent or not so clear on where they think the 2024 deliveries will go.