Tesla has renewed its price war in China just days after its biggest rival in the country vowed to "demolish" Western rivals.
Elon Musk's company yesterday reduced the price of two versions of its popular Model Y electric car by about 4%.
It is at least the second round of price cuts in China so far this year and means some vehicles have been discounted by as much as 16%.
The Telegraph says the latest round of reductions follows flagging sales and intense competition from local electric car makers.
Sales of Tesla's Chinese-made cars, which are built at its factory in Shanghai, fell 31% in July from a month earlier.
Last week, Chinese electric car maker BYD urged domestic players to wage war on Western rivals and "demolish" their competition.
Top electric car maker
BYD, which is backed by Warren Buffett, overtook Tesla as the world's top electric car maker including plug-in hybrids last year.
Evidence of an escalating price war in the world's biggest car market has worried investors.
Tesla shares have dropped 17% in the past month.
Demand for electric cars in China has flagged since Beijing paused generous incentives last year, leaving manufacturers squabbling for sales in a smaller market.
Chris McNally, an analyst at Evercore ISI, said the Chinese price cuts may lead to "similar select cuts" by Tesla in the US and Europe.
Tesla has partly blamed slowing sales in China on a drop in production as it upgrades its plants to produce new vehicles.
Export opportunities
Chinese manufacturers are looking West for export opportunities as the domestic market becomes saturated.
The boss of Vauxhall-owner Stellantis last month warned of an "invasion" of Chinese electric cars.
Carlos Tavares spoke of a "brutal scenario" where Western manufacturers must compete with cheaper Chinese-made cars while also having to invest billions into electrification.
FTSE 100
The UK's top share index, the FTSE 100, was down 14 points at 7,492 shortly after opening this morning, following yesterday's 17-point fall.
Brent crude futures were up 0.34% at $86.50 a barrel.
Companies reporting today
- Half-year results: Legal & General Group