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Electric vehicle giant Tesla ( TSLA.O ) cut the starter price of its Model 3 and Model Y cars in China by 9%, according to listings on the company’s Chinese website on Monday.
The starting price of the Model 3 sedan has been cut to 265,900 yuan ($36,727.03) from 279,900 yuan, while the Model Y sport utility vehicle has dropped from 316,900 yuan to 288,900 yuan, according to product price listings on its Chinese website.
Tesla is adjusting prices in line with costs, the company told Reuters in a statement. Capacity utilization at its Shanghai Gigafactory improved, while the supply chain remained stable, resulting in lower costs.
Tesla’s first price cut in China was in 2022, which raised the price of two models earlier in the year due to rising raw material prices. This comes after Tesla has offered insurance incentives to buyers since September to encourage more purchases.