Electric vehicle maker Tesla Inc has announced cuts to the price of its cars in China.
In a partial reversal of price hikes imposed earlier this year, the U.S auto giant cut prices by about 5%, according to a Bloomberg report.
Tesla lowered the price of its locally-built basic Model 3 to 265,900 yuan ($36,774) from 279,900 yuan, the report added.
The starting price of a Model Y SUV was also cut to 288,900 yuan from 316,900 yuan.
The cuts make sense as Tesla is facing stiff and unprecedented competition from local EV makers such as BYD Co., Nio Inc., and Xpeng Inc.
Data from the China Passenger Car Association reveal that domestic automakers accounted for almost 80% of EV sales through the first seven months of the year.
According to the report, the cut comes as Tesla China is seeing “improvement of production capacity utilization" at its Shanghai factory and "relative stability of the supply chain" that has spurred lower costs.
