Investing.com – Shares of Chinese electric vehicle makers fell on Tuesday, following an overnight decline in Tesla Inc (NASDAQ:) shares after the world’s most valuable electric vehicle company recorded a sharp decline in sales in China.
Shares of BYD (SZ:) Co Ltd (HK:), NIO Inc (HK:), Shpeng Inc (HK:) and Lee Auto Shares of (NASDAQ:) Inc (HK:) fell between 1% and 5% in Hong Kong trading, leaving the broader index down 2.5%.
The losses came after Tesla shares fell 7.2% after the company said its sales in China fell in February despite increased consumer spending during the Lunar New Year holiday.
Tesla noted a 19% year-on-year decline in sales of Chinese-made vehicles, which fell to their lowest level since December 2022. The drop comes as a result of a bitter price war with its Chinese counterparts to capture the world’s largest electric vehicle market.
But weaker sales may now point to slowing demand in China, especially as the country faces a bleak economic outlook.
The decline in sales also raises the prospect of further price declines in the country, a trend that does not bode well for all electric vehicle makers in China given that it has eaten up much of their profits.
BYD overtook Tesla as the top-selling electric vehicle maker in December, with the company appearing to have a much stronger presence in its home market. Shares of BYD fell the least among its peers on Tuesday.
The firm launched a new version of its best-selling car on Monday at a lower price than the old model, likely escalating its price war with rivals. BYD’s February sales also fell 37%, but remained well ahead of Tesla in total volume.