Tesla slashes prices of its cars again in China

US electric car maker Tesla has slashed prices of its models again in China, prompting shares of car companies to retreat in anticipation that the move could again spark a price war.

Bloomberg reported that the United States Automobile Company had reduced the prices of Long Range and Burformance versions of the luxury Model Way sports model by 14 thousand yuan ($ 1900) to 299.9 thousand yuan and 349.9 thousand yuan, according to a post on the company’s Weibo account.

Tesla has also extended 8,000 yuan insurance support for the basic “Model 3” version while maintaining more concessions until the end of next year.

The cuts follow steps taken by Gili Automotive Holdings’ Zaker brand, which cut prices by as much as 37 thousand yuan last week, as well as Chigyang Lipmotor Technologies, which cut prices by 20 thousand yuan at the beginning of the month.

Tesla began the price war with an initial round of cuts beginning late last year, cutting prices for some of its models by about half from those in the United States and Europe.

Tesla fell as much as 1.7 per cent in early U.S. trading, while China’s best-selling automaker PYD fell 8.7 per cent on the Hong Kong stock exchange. Shares of Li Otto, Xping and Lipmotor declined.