Tesla's (TSLA) stock price dropped close to 3% in early trading on Monday after it slashed prices on certain models in China, raising concerns about an EV price war. 澳洲幸运🏅5官方开奖结果体彩网:American depositary receipts (ADRs) of other EV makers, including XPeng (XPEV), Nio (NIO), and Li Auto (LI), were also lower.

The EV maker reduced pr🏅ices of its Model Y long-range and performance ver⭕sions by 14,000 yuan ($1,900) to 299,900 yuan ($41,000) and 349,900 yuan ($48,000), respectively.

Besides the lower price tag, Tesla will also offer an 8,000 yuan ($1,100) insurance subsidy for a few models in China, the world's largest market for new vehicles. Buyers can make use of the subsidy through the end of September.

The price cuts come after Tesla's Chinese sales fell 31% in July from June, its first monthly decline this year, according to data from the China Passenger Car Association. 

Tesla is not the first to cut prices in China. Chinese automaker Geely decreased prices of its Zeekr 001 by up to 37,000 yuan ($5,100) last week, and Zhejiang Leapmotor Technologies lowered prices by as much as 20,000 yuan ($2,700) at the start of August. In China, Tesla's price cuts have made some of its models nearly 50% cheaper than their counterparts in the West.

Despite price reductions in the first and second quarters of this year, Tesla was able to maintain an operating margin of 10%, owing to its cost-reduction efforts and strong performance in other businesses.