Why is Tesla slashing car prices in China for second time in 3 months?

As competition picks up and the demand outlook darkens, Tesla cut car prices in China for the second time in less than three months.

The US automaker slashed prices for all versions of its Model 3 and Model Y vehicles in China by between 6 per cent to 13.5 per cent.

China is considered key to Tesla’s global ambitions. In contrast to the United States and Europe, overall auto sales there are still rising because many people do not own cars, or own just one vehicle. The Chinese government has heavily promoted electric vehicle ownership as a solution to urban air pollution, though it has slashed subsidies recently.

Tesla has grown rapidly in China but is facing increasingly stiff competition from companies like BYD, which sells well-regarded cars at lower prices and is the country’s No. 1 electric vehicle brand.