Tesla Inc. made its second round of price cuts in China this week, further fueling concerns the carmaker is reigniting a price war.
The company reduced the price of Model S sedans and Model X sport utility vehicles in inventory by as much as 70,000 yuan ($9,600) to 754,900 yuan and 836,000 yuan respectively, according to a statement published on its official WeChat account on Wednesday.
The move comes just two days after Tesla marked down the Long Range and Performance versions of the Model Y SUV by 14,000 yuan and extended an insurance subsidy for the base version of the Model 3 sedan, keeping the perk in place through the end of next month.
The cuts may further accelerate a price war in the world’s biggest auto market, and put pressure on premium carmakers such as BMW AG and Mercedes-Benz Group AG to follow suit. In addition to the discounts, other incentives including free fast-charging credits and trials of Tesla’s enhanced Autopilot system for referrals remain in place.
Tesla shares fell 1.3% at the start of premarket trading Wednesday. The stock has dropped 20% since Chief Executive Officer Elon Musk warned of the potential for further price cuts during the carmaker’s July 19 earnings call.
Read More: Tesla Starts China Price War That May Destroy Some Carmakers
Tesla’s shipments from its China plant plunged 31% in July to the lowest level this year. The automaker announced last month that global production would drop in the third quarter due to downtime for factory upgrades, without offering specifics. It’s expected to start making a revamped version of the Model 3 sedan soon.
Musk said last month that Tesla would have to keep cutting prices if interest rates continue to rise. Several rounds of discounting already have taken a toll on the company’s automotive gross profit margin, which fell to a four-year low in the second quarter.
Read More: Tesla Rolls Out New Base Model S and X for $10,000 Less
(Updates with early trading in the fifth paragraph.)
