TESLA Inc. has cut prices in China for its Model Y long-range and performance versions starting yesterday.

The U.S. car company dropped the starting prices of both models by 14,000 yuan (US$1,934.58). The Model Y Long Range’s starting price drops 4.5% to 299,900 yuan and the starting price of the Model Y Performance is now 349,900 yuan, down 3.8%, according to an announcement on Tesla’s Weibo account yesterday.

In the same announcement, Tesla also said it would offer insurance subsidies in China of 8,000 yuan for Model 3 buyers of entry-level, rear-wheel-drive versions of the Model 3 inventory vehicle between Aug. 14 and Sept. 30.

The cuts follow the likes of Geely Automobile Holdings Ltd.’s Zeekr brand, which lowered prices as much as 37,000 yuan last week. Zhejiang Leapmotor Technologies Ltd. cut by as much as 20,000 yuan at the start of the month.

Tesla triggered the auto price war in China with an initial round of cuts last year before further discounts in January that left Tesla’s Shanghai-made cars as much as 14% cheaper than last year, and in some cases almost 50% less expensive than in the United States and Europe.

Last month Tesla CEO Elon Musk said further price cuts were a possibility, even if it squeezed the automaker’s margins.

Sales of Tesla’s China-made vehicles fell 31% in July from June, data from China Passenger Car Association showed earlier this month, marking its first month-on-month decline since December.

Clean car sales in China declined in July from June, though purchases shifted toward major players with BYD Co., Li Auto and Nio Inc. all reporting new sales records.  (SD-Agencies)