MARKET REPORT: Tesla price cuts spin automaker: Shares drop up to 6% in early trading on Wall Street
Tesla shares fell after slashing the price of its models by 20% globally.
In a bid to boost sales and put pressure on rivals, the electric carmaker has cut prices for its Model 3 and Model Y cars in the United States and across Europe.
The impact has been felt strongly in the UK, with discounts on some Tesla models of up to £9,000.
Price drop: Tesla shares tumble after slashing the price of its models by up to 20% globally
Shares of Tesla, which lost about two-thirds of their value in 2022 in its worst trading year, fell 6% in early trading on Wall Street.
Dan Ives, an analyst at Wedbush Securities, said Tesla’s price cuts come amid a brutal “arms race” among electric car makers.
But he also warned that Tesla was grappling with increasing pressure on consumers as the global economy slowed, with demand “starting to see cracks”.
The Tesla share price rout cost CEO Elon Musk dearly as he saw the value of his 13.4% stake plummet.
Last night his stake was valued at around £42billion. Those shares would have been worth £142bn just over a year ago.
Back in London, the FTSE 100 rose 0.64%, or 50.03 points, to 7844.07 as it neared a record high. The FTSE 250 gained 0.56%, or 111.71 points, to 19,952.84.
Taylor Wimpey said he plans to cut jobs and will buy less land and build fewer homes this year as the housing market slows. The homebuilder – whose shares climbed 1.9%, or 2.1p, to 114.75p – outlined plans to save £20m a year as the industry reels from the shock of the rising mortgage rates and economic uncertainty on demand.
Rivals Persimmon (up 0.8%, or 11.5p, to 1,416p) and Barratt Developments (up 0.8%, or 3.8p, to 455p) also sounded the alarm over a slowdown of the real estate market following the pandemic boom. Taylor Wimpey built 14,154 homes in 2022, just below the 14,302 completed in 2021, and cancellation rates for the year hit 18%, down from 14% a year earlier.
But despite the turmoil caused by rising mortgage rates after September’s disastrous mini-budget, Taylor Wimpey’s 2022 earnings would likely have met market expectations of around £921m.
Smaller rival MJ Gleeson also said he sold fewer homes last year, down 4% to 894 in the six months to the end of December.
He pointed to falling vacancy rates in the six weeks to Christmas and said he was “cautiously optimistic” about a recovery in the housing market this year as mortgage rates ease and customers leave homes. other developers to buy some of his more affordable properties.
The shares jumped 8.2%, or 31p, to 411p. At Redrow, the mid-cap homebuilder has completed its £100m share buyback programme. The shares fell 0.3%, or 1.5p, to 522.5p.
Shares of bookmaker owner William Hill, 888, fell 4.6%, or 4.25p, to 89.25p after reporting a 3% drop in annual revenue despite a World Cup boost . The decline was driven by a 15% drop in online revenue in 2022 to £1.33bn.
Investors in Capricorn Energy will decide the future of the oil and gas company with two deciding votes on February 1.
On a mammoth day, shareholders will vote on whether to support Capricorn’s proposed merger with Israeli gas company Newmed and attempts by third-biggest investor Palliser Capital to reshuffle the board. The shares slipped 0.8%, or 2p, to 242.8p.
Meanwhile, C&C, the Dublin-based drinks company, has warned that its profit for the year will be below expectations due to lower consumer spending and the impact of ongoing rail strikes.
The FTSE250 company behind Bulmers, Magners and Tennent plunged 9%, or 16.6p, to 167.2p.